I am considering buying a student rental property. Is it worth the hassle of dealing with students?

Question

I am considering buying a rental house property nearby a University for $150,000.

The monthly gross income works out to $1800. I would have to pay for water/electricity etc. (approx. $200 per month), prop taxes (approx $150 per month).

Considering only 8 months of the year are guaranteed University student months (the town is largely vacant during the summer), and the fact that students seem to be a pain to deal with, is it worth the investment?

Answer 1

Here's an idea: find a rental that will work for a family, and rent to them. In a college town, they can have a hard time finding the right place to live, and you may end up with better long-term tenants 12 months out of the year, instead of 8.

Other than that, it sounds like you'd get positive cash flow with 20% down, even if it was vacant 4 months. However, college students are often bad tenants. If parents will guarantee rent and security deposits, and you don't mind high turnover, trashed premises, etc., go for it! I can guarantee it will be a learning experience for you, too...

Answer 2

As a former college student, I can tell you they are not responsible, and will most likely trash the place.  Think about it -- huge parties, underage drinkers, vomit everywhere, can't scrape enough money together to pay the rent...is this what you really want to get into?  Every single kid I knew in college that had a house lived in a total dump.  Eventually the landlords stopped making the repairs and taking care of the damage, and the houses turned to dumps.

Answer 3

Turn the possible negativity into an asset!

Perhaps seek out biz or RE majors

and hold seminars of real life real estate

methods.

Talk to them as if you believe they will

be great tenants and then, help them become and stay great!

COllege kids are smart, impressionable

and will always remember those who

helped and those who hindered them.

Available to guide you further.

Answer 4

Ok, assuming you're putting 20% down and have a 6.5% rate, you're making 100% more than the monthly rent before utilities.

Having managed a building with a lot of students from the UCLA area, it's not so bad.  Some actually stay over the summer and go to summer school or work.

In my experience, to limit the hassel you must have good vendors - PLUMBER, Heating/Cooling, Painter, Cleaning, Carpets.  

Another suggestion, walk prospective renters to their cars before choosing who to rent to.  If the car is a mess, your rental will be in that condition when they leave too.

Yo might also ask renters about their major.  I suspect different majors have different levels of stability.

It looks like a dream cashflow situation to me.  It would be hard to resist going for it.

Answer 5

have you looked at the occupancy in the area?  look for rent signs and check the market rents tell the landloard you are a student and plan on moving out quickly and see what they say.  they are the experienced ones.  don't listen to a broker, they have their interest as a priority.  

the deal sounds so-so, and don't forget other expenses like insurance,  lawn maintenance, and other expenses depending on the age of the property.  if it is old, maybe you don't want it.