Current Junior looking to get into student housing after school

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Current Junior looking to get into student housing after school

Brandon Mruk
Renter · Normal, IL · Member since 2014 · 3 posts · 0 votes

Hey BP members.

I just joined the site today after beginning the first few chapters of The Ultimate Beginner's Guide to Real Estate Investing and seeing all of the references to BiggerPockets. I have become interested in student housing after hearing of very profitable "luxury student housing" which has sprung up all around my campus. Some of these cheaply built "luxury" apartments are going for as much as 900-1200$ per month (most of which, I would assume, comes from the parents). I, personally, pay nearly 7 thousand dollars per year with my two other roommates (around 21,000 for a 12 mo lease). In our building that I wouldn't call luxury by any stretch, the eleven other units all pay the same and we also have a liquor store downstairs that also pays rent to the landlord. I guess the point that I'm making is that there has to be quite a bit of money flowing in to the landlord's pocket while he sends off about 10% to the leasing company who deals with all of the "hands-on" work.

My question is, how do I go about beginning a career in real estate investing? I have talked to others (professors, family friends, etc.) who have gone down the student housing road and I have gotten a lot of good advice, although I don't know when/how I should begin?

I have a good four-year internship with a sub-contractor where I'm very likely to get hired on full-time, but I'm not sure that preparing estimates in a cubicle is what I want to do for the rest of my life. I have always been very "hands-on" and feel that I would do much better working as my own boss, but I don't want to end up failing in real estate without a secondary source of income to fall back on.

Is there a good way to get a feel for real estate while I'm still in school? I realize that as a college student with little money, no credit, and no real experience, I don't have much to offer anyone. I just have the motivation to learn, willingness to work hard, and a desire to succeed.

Any advice would be great!

(Sorry the post was so long, I just have a lot of questions!)

Brandon

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  • Mark Scarola
    Developer · San Diego, CA · Member since 2014 · 294 posts · 70 votes
    12y

    Hi Brandon,

    If you're interested in buying a property and renting it out to students, it shouldn't really be all that different from doing the same outside of a college town. In other words, you still have to make sure that the home can be made safe, that you can find a tenant, and that the numbers work.

    One concern though that might be unique to student housing is the fact that many students will not be looking for year long rentals. So what would you do in the summer? Rent to someone else for just the summer? Only allow tenants who plan to stay year round? Let the place sit empty?

    As far as what you can offer... don't sell yourself short. If you can do an accurate estimate - that has value. If you want hands-on experience, offer to go along with an investor to do a free estimate for them in exchange for the chance to tag along for a day or sit with them for an hour asking questions about how they got started. Many investors may not have "the need", but others (even if they're fairly new themselves) certainly will appreciate the offer.

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  • Brandon Mruk
    OP
    Renter · Normal, IL · Member since 2014 · 3 posts · 0 votes
    12y

    While I know that student housing comes with its downfalls (i.e. the lack of summer tenants, damage prone, etc.) I also see a ton of potential for these rentals. The summer months issue can be fixed by requiring a 12-month lease; a practice that most leasing companies use here anyways. I also think that choosing renters wisely and trying to pick the least risky of them can go a long way. Grad students and girls will more than likely save me a hassle due to their non-destructive habits as opposed to guys who might throw keggers every weekend. Tack on a hefty security deposit and I'll hopefully have myself a rental that won't cause too much trouble and earns enough profit to make it all worth it.

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