Finding Rent for Student Housing

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Finding Rent for Student Housing

Ethan Brown
New to Real Estate · Member since 2021 · 62 posts · 16 votes

Hi B.P.

I'm going into college soon, and I'm looking to do my first deal. I was looking to start out with a house hack (or just regular rental without me living there) near my college. Obviously, I'll be renting the place out by the room to other college students, but I'm not sure how to find how much each room would rent for. When it comes to student rentals, how do you all find how much each room would rent for?

Thank You,

Ethan Brown

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Dave PoeppelmeierBusiness Member
Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
5y

@Ethan Brown that's fantastic that you're thinking this far ahead! However, Student Housing is a very hands-on niche of RE. The biggest thing you have to do is find out what the culture of Student Housing is at your college. Do people stay all year or do leases typically only run 9 months? When is the Rental Season (when students are looking for houses for next year)? What does a nice house rent for? What does a piece of junk rent for? If you don't know these, you might whiff and be severely under renting your rooms or not have them filled at all. 

The other thing you need to understand quickly is how a house works. I know that sounds rudimentary and borderline insulting, but when I was in college, I had no clue how anything worked beyond turning on a light switch and opening the fridge. Your friends/roommates won't have much of an idea either. You need a basic understanding of how the mechanicals of the house work (furnace, AC, hot water tank, electrical box, etc) so you know when something isn't working right and can know when to call for help. What you don't want is a small problem turn into a big (and costly) problem. There are thousands of YouTube videos on how the house works that can help you out.

Student Housing is a fun and profitable niche to get into, and you can hold onto that house long after you graduate. Good luck!

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  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Alexander Murillo 

    Got it. I've found Rentometer to be off in my market as well. I'll go ahead and talk with some property managers and get pre approved though!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Brett G.

    Where I'm looking has got the location down and possibly even the rooms (not sure n that one yet), but zoning is something I haven't even checked yet. Zoning is definitely crazy important with this sort of stuff. Thank you!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Allen L.

    I'll definitely check it out! I'm glad they've been a good investment for you; I'm sure they will be for me as well. Thank you!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Aaron Caminati

    That's great you did the same thing! I'll definitely be reaching out to others to find all that information. I'll also make a plan for how to handle things such as utilities. I'm sure I'll be reaching out at some point. Thank you! 

    1Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Evan Zeigler

    This helps me out as well! Good to hear that this is a year round thing. Thanks!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Patti Robertson

    Got it! Thank you!

    0Reply
  • Jake Hart
    Accountant · Muncie, IN · Member since 2017 · 27 posts · 18 votes
    5y

    @Ethan Brown, My first rental property and my most profitable is my student rental. I have a 5 bed/ 2 bad that has 2 kitchens and 2 living rooms. Its an old 1900's house that was turned into a duplex, but we opened it back up. I purchased that house 6 years ago and it has stayed rented every day since with a short 24 hour period where we turn the property over. In those 6 years, I have only had to list it 1x as I seem to always get other individuals that want to rent it for the following year. The other awesome part with student rentals is the fact most renters are looking months in advance for housing, so I normally have the lease signed 5+ months in advance for the following year. I do rent the house out per bedroom, however every individual in the house is on 1 single lease. So if one person doesn't pay, its on everyone. There are several rental property management platforms that can split rent between tenants, so everyone can pay their portion but its ultimately everyone's responsibility at the end of the day. With utilities, out of all my other properties, this is the only property where I keep the utilities in my name. I do have a clause in the lease that says Landlord pays utilities up to $300/month, so anything over that I bill back. This keeps people from running the AC and leaving the window open or it saves me in the event of a bad winter. Since this home is a student rental, I also have a clause that states if we find a Keg on the property, they will be charged a $200 fee per day. I have never had to use this but I definitely don't want parties here.... It's the perfect party house and being one that has been to many, I know how those can go. The only downside, and its not really a downside to student rentals in my eyes, is that students are dirty. In my 6 years of owning the property, I have never given back a security deposit. I am a very proactive landlord in letting the tenants know that I don't want their security deposit and that I want to give that back, however they must return the property back in the condition they received it. So if you go into student housing, I would highly suggest that your deposit is enough to cover hiring 4-5 people to come in and do slight repairs and cleaning. We turn this property within 24 hours, and I've never had to charge the tenants more or pay any addition outside the deposit. 

    Overall though, my property has provided excellent returns 20%+ ROI annually, is pretty hands off for most of the year, and has increased in value quite a bit over time. I would highly recommend any investor to add student housing to their portfolio. We are actually looking to purchase more in our area after our next few deals are completed. If you do have any questions I'm always happy to help!

    0Reply
  • Austin F.
    Investor · MI · Member since 2015 · 227 posts · 478 votes
    5y

    Most of my portfolio is student rentals. I've found the best way to price out a room is to go through the motions of trying to rent one yourself.

    Go online to whatever site, send some emails, keep digging, find the local hot rental page (college towns have one, and it isn't Zillow, my town is a Facebook group).

    Once you have a handle on the different listing sites you'll probably have a handle on quality level, price, demand, all that. Build your model from there.

    In my college town listing sites are key to attract different renters. My nice stuff goes on Zillow, rooms on the Facebook group, and the big student houses on the college's housing list.

    As far as screening college kids, I've stopped doing background and credit checks, they usually don't have any, and it isn't worth my $40 (I pay for screening if they sign a lease) to find out their RA and their parents are their only references.

    I list early (4 months ideally) and that weeds out most of the riff raff, then I check their Facebook and Instagram if I can find it, you can learn most of what you'd want to know from that.

    Theres a lot more, but college kids are fun, just have to keep your sense of humor about it. (I know that window didn't break on Sunday morning while you were all studying).

    Good luck!

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  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Jake Hart Thank you for taking the time to share all of that information with me! That helps give me an idea of what owning a student rental will look like, as well as some things to watch out for. Thanks again!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Andrew Syrios Great articles. Many helpful tips/points throughout them. Thank you again.

    1Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Austin Barry Thank you! I'll go ahead and go through the process of trying to rent a room myself; I'm sure it'll be very beneficial 

    0Reply
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