I'm analyzing a deal that was presented to me for an off-market 4 bed/1 bath SFH in West Philly in the Cedar Park neighborhood. I have always been interested in the Student rental niche, and this property is very close to both UPenn and Drexel University. The initial estimate numbers look really good after planning a small renovation to add a bathroom and a half, and getting the home up to date. I have a tentative 65k renovation budget planned.
What are your thoughts on what the rental market looks like for student rentals per bedroom? $/bedroom, how many bathrooms usually, what distance away from the schools, etc...
Do you mostly see the entire home be put up for rent where a group gets together and signs one joint lease(in my case, 4 parents/sponsors and their students)?
Extra Keywords: Philadelphia, Cedar Park, analysis, college, university, twin, RM1
It’s a Gold area. I work with someone who is exclusively north of market, west of the river and east of 52nd, serving those markets for students.
Check Craigslist to see what is offered as the winter break may provide some listings.
@Mauricio Botero Absolutely put them on one lease. It’s just like a bank underwriting a loan. The more people that are responsible, the more likely you will be paid the entire contract amount.
I’ve been doing student rentals for over 10 years and have had great success with leases getting paid in full. I think that is almost exclusively due to the fact that everybody is on one lease. There’s always one deadbeat tenant with every group. It’s been my experience that peer pressure to pay bills from his/her roommates will work 1000x more than anything that the landlord says.
[email protected]Mauricio Botero,
How are you. welcome to BP.
Cedar Park as well has Squirrel Park and Walnut Hill are neighborhoods on the cusp of intense development of University City. There transportation is very well located to feed into U City and or DELCO. There are several mid size developers in that immediate neighborhood finding the some opportunities your are thinking but going more Multi Family Development either ground up or re-purposing current properties. Would suggest looking at the subject properties two ways. One as a straight rental and see what your Return on Investment looks like. Then also look at it as a student rental by the bedroom. We just toured that neighborhood on the Diversified Investors Group Van Tour is was solid mix of Flip Homes, rehabbed homes for cash flow whether students and or employees of the Hospitals and Colleges in U City. Leasing with students you attach the students parents always and this can be addressed through your management company which I can refer if you like. Lastly you should also join HAPCO the Landlord Association of Philadelphia, attend the Cedar Park CDC and sure up at least 2 Documented quotes for your construction along with a realistic draw schedule.
Let me know if you have questions.
Thanks @David Weintraub , @Will Gaston , @Joseph Scorese . This is looking like a solid deal now that I saw some of the pictures and it is clearly a student rental by the bedroom opportunity, and after talking to some lenders. Looking now to pool up the funds needed for the down payment and get another estimate on a loan.
Put them all on one Lease