Milford, OH · Member since 2013 · 3 posts · 0 votes
What are peoples thoughts, or ROI standards for rental properties on college campuses. I know when I was in college we paid a fortune in rent, were minimally concerned with minor issues, but in turn were hard on the property. I know rent can be higher around campuses but wanted to see if someone had a standard they used to determine if a property was valued correct. I have heard rent times 8-10 (so if rent is 2,000/ month or 24,000/year the property value would be between 192k and 240k). While this seems to make sense, does anyone have a more detailed concept they use? Specifically one that takes into account the higher risk or young tenants and increased wear and tear on the property.
Jon, we did well by charging the primary tenant a basre rent at or slightly below market rates then additional rents for the roomies. That takes you way over market. Also, you have the parents co-sign the lease. That reduces problems if mom and dad have to make repairs. I had no problems with damages!
As someone who just graduated from college I feel that I could offer some suggestions!
As Bill Gulley has said: Get the parents to co-sign. No exceptions.
I would make sure you lease agreement is in order, especially concerning the higher probability of 'college problems': Growing/selling marijuana/noise violations,supplying alcohol to minors. I'm not sure what the legalities are in your state, but that is is something you definitely want to consider.
One other thing I would recommend is no carpet. The allure vinyl floors are amazing.
Another thing to consider in the lease agreements is if you want to allow lease transfers. It is very common for students to move in together as friends then in a few months they hate each other and want to move. This is another reason you have to have the parents co-sign.
Jon,
I currently own a property off campus and rent to roommates. And am actively looking to buy two more this year. I can tell you that if you aren't a slumlord and take care of your tenants you will be surprised how well some college students maintain houses/apartments.
You also need to market to the right college students. Freshman and low GPA doesn't help an applicant. You can ask for unofficial transcripts when screening applicants. Good grades never hurt!
Also, I find talking to other local landlords that they have untraditional leases in some cases.
-2 yr leases (graduate students)
-cash scholarship for paying rent on time for full year.
-furnished can demand premium rent for international and out of state students.
My 4 bed/ 3 bath rents for $2,000 a month. We paid $230,000 for it turn-key.