All Forum Posts by: Zachary Trigger

Booked

@Lee Stephens just call the other rental listings and see what is included in the rents. Picking up the phone and talking to people is going to give you the best information, not some web app that has 100 different inputs and Variables.

This is a house I came across in my local area. Follow the YouTube link, it gets strange.

https://youtu.be/dnNay1Ylmf0

https://www.redfin.com/PA/Ambler/1612-Norristown-Rd-19002/home/38907751?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link&fbclid=IwAR1c3bHpIwoYDOU0TK-155g5eWuc8ts3ZGnHNgdVfD550J5eKVTV3BjZdJ0

@Matt Hangsleben as everyone has said it's a personal decision. But I will tell you what I do with my 401k. I contributed 20% per pay period that my employer matches 6% of. With my 401 you can pull loans from up to the amount that I have contributed. When repaying the loan I pay myself 4% interest on the amount I borrowed. I like this method because the money is withdrawn right out of my paycheck and is not as easy to withdraw as a savings or checking account. I also like that when I repay the loan it's also withdrawn right from my pay. I also benefit from the 4% interest that I'm paying myself. The only drawback is that I can only have one loan at a time. I'm about to take 15k for a down payment and cosmetic rehab on a property. When I BRRRR the property I will repay the loan in full and repeat. Hope this may give you some idea of the options you may have.

@Emily Cole

You also need to check into what the normal leasing periods are for the school. Colleges in large city's that students can get summer jobs , tend to do 12 month leases. But colleges that are in small towns with no summer job market or things to do tend to have 9 month leases. So in small towns the rental will be empty for 3 months unless you can find a summer student. This is also important for insurance purposes. Insurance providers do not like empty houses. Every college market is different, so spend the time to learn the quarks of the market.

@Mark Trebor it really depends on the number of bedrooms. In that price range you can find housed from 3-5 bed 1-2 bath depending on how close you want to be to campus. Also for whatever reason my area does rent by the semester not by the month, so unless you find a student attending school in the summer your rental will set empty. To answer your question students pay between $2 and $2.3K per semester so that work out to $500-575 per student/month. So if you have a 5 room house with all the rooms filled you are looking at $10K on the low end per semester and $20K for both semesters. That would workout to be $2,222K per month for the 9 months that the students are in class or $1,666K averaged out over a 12 month period. You can take the same cost per student numbers and apply that to any size house and it is obvious to see that having a larger house will have more cash flow even at a higher buying price. Most of the houses also have basements that are not utilized for living spaces and could be a potential value add situation if you put two bedrooms a bath and a kitchen in them to rent as another unit.

Mark what do you do for finishes. Most of the houses in my area are a dump that have not been updated in 20 years. They have industrial carpet, cheep appliances and the bathrooms are nasty. I really think by upgrading the finishes to life-proof flooring, SS appliances, updating the bathrooms and kitchens would let me increase the rents by $400 per student per semester. I have attached so photos for reference any recmodations would be welcomed.

@Trevor Cox I'm also looking into college rentals, but in the state of MD not OH. The market I think you are looking in is similar to mine it terms of price point 60-80K for a 3-5 bed 1-2 bath house. I'm assuming you are also new to real estate investing and we may share some of the same questions. I have been searching the BP forums and have listened to sever BP podcast on the subject and the following is what I have deduced that may help. From what I have read almost everyone has the parents of undergrads sign on the lease, along with each student that will be living in the house. @Mark Trebor is the first post I have seen that only has the students sigh on the lease, his thought process make sense to me. My only thought on the idea of having only students sign is, what legal recourse would one have agents students when they probably have not finances? Meaning if they damaged the property beyond what the depots would cover and you took them to court and won, they still may not be able to pay. If Mark has anymore insight I would defiantly be interested.

Treveor what is the rent structure in the area you are looking? For my area rent is paid by semester not by the month, so most of the time during summer months houses are not rented. How do you plan on managing the property? I live about 3 hours from the area that I'm looking so property management is most likely will be the way I go. The only issue that I'm having with PM is that all of them in the are seem to be poorly run.

If you are looking for more information on college rentals I would suggest doing a search of BP, you will find several forums and other information on the topic. If you have not already.