Thread: Student Housing Rentals

Hey all. I'm a university student and looking to start buying property at a young age, hopefully have a large number of properting being rented out, then flipping them, etc.

But my question is, instead of buying apartments, condos, etc, would it be smarter for one to buy houses around universities and rent them out? $500/student, around 4-6 students per house, it would pay off the monthly mortgage payments and still make the owner a good profit.

I'm new to this, so I'm not really sure what's better, how to do it, etc, but since I am renting out a room in an off-campus house, I was just thinking why more people dont as many properties as possible in a uni area, since its very easy to find renters obviously.

Thanks in advance for any help

i won't touch student and low income housing. too much maintenance and flaky people without credit. besides, summer time often leads to vacancy.

commercial RE on campus makes more sense since turnover is low and occupancy is fairly good.

Originally Posted by djantlive

i won't touch student and low income housing. too much maintenance and flaky people without credit. besides, summer time often leads to vacancy.

Direct response to student housing:

Your statement is completely inaccurate as the parents who have commonly long lasting established history co-sign for their children. You also generally are satisfied for at least the entire school year.

I have a few properties that i do similar:

Near a nice private university (walking distance from Rice U)
I used to do semester by semester leases..but that sometimes left summer completely dry...so now I do 6 monthers

the parents always pay so i have nothing to worry about. I would rather deal with the parent than the student.

Yes I was going to say, most of the off campus houses require a 8 months (2 semesters) or 1 year contract, so that summer is not vacant. Mostly it's 1 years. So that really isn't an issue. Also, it's the parents that sign so getting the payments is not an issue.

Would getting that kind of property be better than a regular apartment/house to rent?

Originally Posted by MarcNV

Direct response to student housing:

Your statement is completely inaccurate as the parents who have commonly long lasting established history co-sign for their children. You also generally are satisfied for at least the entire school year.

2nd this...have parents sign the lease and you don't have a problem.

The best student housing the buy is for universities in highly populated cities (Eg. Toronto in Canada), since the students are renting condos in the same areas as professionals its impossible to find 8 month contracts, so getting the students to sign a regular 12 month contract is no problem hence taking out the vacancies....My parents are having a problem getting people so sign an 8 month lease on a student house in Hamilton, Ontario near McMaster because there are so many student houses offering 8 month leases, and even though their like $100/mo more it still works out to less if they sign with another person and get an 8 month instead of 12.
I on the other hand bought a condo downtown Toronto, Ontario near U of T campus and its basically right in the middle of all the offices and all, so it takes no time to get new people to move in if I need to and I can get a 12 month contract with no hassle. Also I see about 1700 per month after everything while my parents even with a full house (6 people) only see $1500 or less if they have to pay someone to mow the lawn or shovel snow.
When I sign students or anyone really though I do a credit check (well the realtor does and sends it to me) and I do a background check on them and their immediate family just in case so if they have family come and stay or whatever I know they are decent people. But pretty much all of my tenants have had their parents co-sign (all of my renters have been under 24 so far).

Resale value I am not 100% sure about because at the moment I could sell it and make about 10% on top of what I paid, but with the amount of houses and condos going up in the area I doubt I will see any better ever really.
Resale for my parents because its a house would be better and I know it is since they have had it for 3 years now and have seen close to 6/7% increase in value per year, so they are looking at getting what they paid plus close to 20%.

Really unless you are still going to school in the area or know someone personally who goes to the school in the area of your rental properties it can get hard to find renters for some areas, you really have to do research and make sure the amount of people renting is more than the amount of people offering houses like the case is in the area of my rental.

Also if you want the actual figures, what I paid and see back yearly and all I can send them to you in a PM

Hope that helps

It all depends on the university you go to. When I went to the University of Michigan, houses that were on campus were selling anywhere for $600k-$2 Million. The only person that had that type of money was a family called the Beals who had the ability to buy whatever property they wanted and sell the property to the University for a crazy profit. So in all, it depends on the university the bigger the name the school has the higher the cost of multiple room house is going to cost. I wish you success.

Student housing can be very profitable if managed well. If you are all hung up about someone moving out and stuff, don't bother getting into it. I have a bunch and manage them on my own.

There are a few things that most people oversee:

How much you're carrying costs as well as your expenses will be. It doesn't matter how much you are bringing in if aren't turning a buck.

Also, what are your goals? Long term? short term? Flipping? Depending on that you will want to manipulate your mortgage payments.

Do you want cash flow or do you want equity?

Student housing requires a lot of cleaning and hands on fixing.

There are tons of factors if this is a good business for you. You might make a better buck investing somewhere else.

Also keep in mind that your a young dude and will need cash to buy these properties. Lending is extremely tight right now and usually requires atleast 30% in cash to put a deal together sometimes more. Sucks but banks do not want anything to do with these types of loans right now.