All Forum Posts by: Jenni Purvis

Ahmed Moussa I would agree with the higher turnover with student housing. I have a small multi family property in Emporia with some student tenants. They are much more work (roommates, scholarship payments, semester changes, etc.). And the keys. Goodness gracious, college kids lose keys like I never would've imagined! The multi family properties' cash flow on the surface is better but turnover is costly. In my single family homes, I make less each month but professionals/families tend to be more reliable and need less management than the students do. I probably even out when I take into consideration the extra time and effort that goes into dealing with student tenants. Just my experience.

@Jeff Rabinowitz

Thanks for the great questions! Our investing now is to build future wealth, all cash flow goes back into investing. It would be great to have the option to quit my job in 5 years if I wanted to, but it's not necessary. I like my job and not sure that full time investing would be the end-all for me, though I will certainly take any extra income I can figure out how to make. Ultimately, I would like to cash flow about $10k/month within 12-15 years, whether I do that the slow way (traditional financing, cash flow pays off mortgages early) or the fast way (owning riskier properties/creative financing that cash flows faster now). I'm not in any major hurry to get rich from my investments, but I do enjoy the Rubik's cube solver mentality of the real estate game :)

@Cal C. , thanks for directing me to the SUNY thread, I enjoyed reading it. There are lots of choices in Emporia for run down places that produce good cash flow, but I assume they also come with some of the issues discussed on that thread.

@Anthony D. Blue Valley does probably have the best appreciation (Leawood, in particular), but the numbers make no sense to me for rental purposes. I probably have a little landlord crush on my Roeland Park house because I would've loved to live there when I was a new grad, it's a fantastic location. Not sure that it makes sense to hold on to it for appreciation alone, but it does seem to balance cash flow and appreciation a bit better than other Johnson County areas might.

Good point Eleena de L.

Hi @Andrew S. , I have properties in a college town and someone directed me to this thread to follow! I invest in a small (division 2) school in the Midwest. One of the reasons we bought our first 'student' housing there was that there is a steady supply of renters and the rents are much higher, as a percentage of the property purchase price, than some of the other parts of town that we looked at.

A few things I've learned already about renting to college students.

1. They are still kids. One guy has lost the key to his place three times in the last five months. Seriously. Three times. So they are not as responsible as, say, a working adult.

2. Rent comes in at odd intervals. We've rented to some athletes and they like to pay per semester because that's when they get their scholarship money. That's fine, but then for the summers I get wads of cash at random times as they try to prepay before they leave for the summer or as they get paid from their part time job.

3. The turnover is higher. In my SFRs, I can keep the same tenants for several years with no issues. College kids tend to move year over year, so be prepared to get good at your move-in/move-out policy. Especially since everyone's leases in a college town are up at the same time, it's not always possible to get people in to a new place when they would like.

There is some upside:

1. Expectations are low. Not that I provide dirty places to live, but ours is cleaner and nicer than the competition, so it's really easy to rent and we can get a bit of a premium. I have new tenants moving in to one place and they were surprised that I was going to clean the carpet for them.

2. Tenant screening is pretty easy since college kids post their entire lives on Twitter, FB, etc. You can just google their name and get a pretty good idea if there are any red flags. Again with renting to athletes, it's easy to verify via the school's website if they're actually on the team. It's helpful since they may have few or no previous landlords to be used as a reference.

Good luck, would love to know what you decide to do!

I invest with a buy and hold strategy in two very different markets, about 100 miles apart, and we're analyzing where to put our money next.

Our first SFR is in an inner suburb of KC, a fantastic location for young families or new graduates. The area has had great appreciation in recent years (our property has increased an estimated 20% in value since we purchased it at the end of 2011) and shows no signs of slowing down. Several new retail centers (IKEA, just down the road!) as well as proximity to downtown work and employment hubs in the outer 'burbs make the location an easy rental.

Cash flow on the property is around $250/month, with a rent multiplier of about .85 (using our purchase price from 2011). I think we can increase rent by at least $150/month at the end of the current lease, which would get us closer to a .95 multiplier.

Our second SFR and our duplex are in a small city/college town where property prices are much lower and rents are fairly high. The economy there is growing slightly, but pales in comparison to KC. The university in town has always been the stabilizing factor. Our SFR there is cash flowing about $200/month and has about a .85 multiplier (my sister is the tenant and we remodeled the kitchen with above market finishes, so we knew we were putting in more cash than necessary), but, in general, getting a 1-1.5 multiplier is really easy there.

Our duplex was a steal and we're getting 1.5 multiplier on it (one unit was rented below market by about $250 when we bought the place but we are honoring the lease for as long as they want to stay, they are great tenants) and the place is cash flowing upwards of $600/month.

Cash-on-cash is much better in the small town, as good SFRs cost about 1/3 (or less) than they would in KC and rent is closer to 1/2.

I'm curious to know what the BP community thinks here. Should we hang onto the property in KC to take advantage of the potential for appreciation and rent increases, or do we sell it and invest in more properties in the secondary market that have higher cash returns but very little appreciation? Thoughts on staying diversified in two markets if we know them both well? Would you add property in the growing economy (KC) market so as to not be overly invested in a smaller growth market (with the stability of a mid-level university in town)?

Interested in everyone's thoughts!

Hi Derrick Carpenter you sound very similar to me (busy career, kids at home, RCJH, goal to retire at 45)! I've been investing for about 3 years and have probably done it the slowest, most cautious way possible. My husband is a realtor here in KC, so that helps with research, but we do 25% down and use traditional mortgages. We know we could probably crank up our cash-on-cash return by getting more creative, but we're looking really long term and don't have any real fire in ourselves to over leverage. That said, we should have our properties paid off in less than 10 years, using just the cash flow from the rents. It can be done! Would love to work with you through any scenarios you are thinking through if you ever need an additional two cents.

Vicki Stewart IKEA should be great for the area, though I personally find that place terribly overwhelming! Ha! Are you targeting any specific neighborhoods for your business?

Hi Vicki Stewart ! I'm in south Overland Park and have a rental in Roeland Park. I also invest in my hometown of Emporia, which reminds me so much of Brookside. Looking forward to learning from each other!

I have a couple of rentals in a college town. The demand (so far) has been great and we haven't has trouble renting them. We have a great relationship with a realtor in the town who helped us understand appropriate rents and general demand. I follow him on social media too and watch the comments section when he posts one of his properties for rent--always 10 or more inquiries on the first day via that avenue. In short, it depends on the particular town, but small spaces don't seem too detrimental to a college kid. Good luck!

Hi guys! I just joined BP and am in south Overland Park. I currently have a SFH in Roeland Park and a couple of properties in Emporia. Would like to connect with some other active investors in the area to share experiences and knowledge. My husband is an agent, so I have access to all the MLS info I need, but now I'm looking for a network of folks that are actively investing in residential or commercial that I can learn with. Let me know if you are interested in discussing your experiences!