College Rental Analysis
Hi Everyone. Looking for feedback on a college rental I'm considering moving forward on. Here is a link to the BP analysis that I ran. Below are a few notes:
- The house is a 4 bedroom and I'm going to make the dining room a 5th bedroom to add value.
- $3,000 for rent is a conservative estimate. I spoke to 50 students and several landlords and $600/room is the lower end of what they pay/charge per room. Many pay $700, but I'd rather rent it quickly the first year to get it cash flowing than sit on a vacant property.
- 1 year leases are standard in the area even for students. The students I spoke to all expected to sign for a full year.
- $200 Misc is for lawn care and snow removal, since I can't rely on students to take care of this. Again, I was conservative with this. Most landlords are paying $75-100/month for this
- I put 5% of the rent for vacancy, 5% for capex, and 5% for maintenance
- $25,000 maintenance is for a new roof, building a wall and door for the dining room, painting the entire inside of the house, planting new grass, and fixing the concrete deck. I also have an inspection contingency in case something expensive comes up during the inspection.
- Special insurance is needed for college students, hence $150/month.
- I'll be self-managing, but set aside 10% for a property manager.
Any feedback would be greatly appreciated!