All Forum Posts by: Greg Cooksey

I definitely agree, Lane. I don't own any student housing properties yet, but I a going into it without any expectation that it will be mentally convenient. Mostly because I was a student tenant once, and truth be told - I wasn't a great one back when I was 18-19. I've learned a lot since then, but I expect to need quite a bit of hands-on management among other things. 

Timely thread, and great info! @David Clinton III, can you tell me a little more about your business bank accounts? Are these accounts that you take out a line of credit or loan for properties? Did you use an LLC to purchase, and what did they require - 30% down?

Renting to students is something I am looking into carefully currently. There are a number of excellent college towns here in WA. There are some real pros and cons to renting to students, the biggest con being their maturity level on average. I certainly don't mean that to be insulting to students, but it's something that many student housing landlords have learned. There is also the issue of turnover, you will probably have many students move out at the end of each year, and you have new tenants move in. This means cleaning and prepping the unit more often than other types of rentals. Sometimes there are even zoning issues in certain college towns. These zoning regs don't allow more than two un-related adults to be on a lease in one home - unless it's zoned as a commercial property (i.e. apartment complex). 

On the flip side, there are ways to mitigate possible damage from something like a college party, and many landlords require the parents to co-sign the lease, especially if they are first time renters with no rental history. This won't always stop them from partying, but it will help if there is damage that the young tenant can't pay for. Also, just because you have frequent turnover of units doesn't mean that you won't have a low vacancy rate. College towns will always have students, and if you are priced and located well it shouldn't be a problem in a decent quality unit. 

Probably the most attractive part of renting to students, in my opinion, is the potential for cashflow. Look for houses with second living rooms, unfinished basements and extra bathrooms. When you are looking at houses, maybe it's only technically a 2 bedroom house, but it has the potential to be a 4 bedroom house with a little drywall in the basement, a couple of closets and a door. You have the potential to gain instant equity by creating more bedrooms. 

Finally, on the cashflow aspect, if you have a number of rooms in a single home, each room can be rented out on a lease; whereas a single family home being rented to a single family may go for $850-$1,200/month - you might be able to rent each of your 4 bedrooms out for $400-$500/month depending on the location and your market. 

I like the idea a lot, and it definitely deserves some more looking into. 

@Ryland Taniguchi - thank you for posting that update about Tacoma's permitting system. It's unfortunate, but it's good to know!

Has your bank told you which conditions they will loan on a property? I'm sure you know that the VA loan has some restrictions, so you will have to live at the property for at least a year (in at least one unit if it's a duplex, triplex etc...). They may also not finance a full flip if it needs a lot of work - especially structural work - and the LTV is too high. It all can depend, so just make sure that your financing lines up with what you want to do so there are no surprises.

I am trying to do something similar right now for my first investment is to buy a rental property (probably with my VA loan) and "house hack" it. I am looking at properties that are not move in ready so I can try to get a lower offer accepted and get the money for the rehab included in my loan. Live in one of the 4 units for a year and then move out and refinance.

I would highly recommend coming to the next local BP meet up in Lakewood - should be sometime later this month. There are a lot experienced people there to talk with and network. 

That's not a bad idea. I wish I was going to have more free time, but I'm just now sure how that's going to play out on this trip. I will make a point of it next time I'm there, and I'll try to plan on having some more time to look into investing there. I love the idea of renting to students, and while I understand that it has its pros and cons; I am very interested in that niche. 

It's great to hear from a Spokanite. I moved there with my family when I was 16 and graduated from Mead HS. From there I went to U of I in Moscow for a couple of years and then moved back to Spokane for a bit before enlisting in the Marine Corps. I sure do miss the east side!

I would think that heavily depends on the market you're in, the neighborhood the house is in/comps. You don't necessarily need to be the nicest house on the block. 

If all the other houses in the neighborhood have it, it might be a good idea, but if that's not the case and you spend the extra money to put granite in - you might be overbuilding and you may not get your returns. 

A good first step is always a business plan! Put a good professional business plan together. You may not have enough info for entries in every single section, but putting your thoughts/goals/plans down on paper in an organized business plan will help you more than you know.