I Found the Golden Ticket... I think?

[Nicolas Jefferson]

Hello BP family, thanks for taking the time to help me with this dilemma!

I'm interested in student housing, it's actually the niche I've been focusing on for awhile. I found a college where the rent seems to high compared to the prices of the houses, so I did my research on the area and there is one house that popped out to me.

To say as little as possible on the house, it is listed at $60,000 5 BR, 2.5 Bath.  The owner said that the house rented out for the 2014-2015 school year at $325 a bedroom. That is insane to me and I couldn't believe the return the house has. So I asked to tour the house and there is nothing extremely wrong with the property. No major rehabs need to be done, and there is even a possibility for a SIXTH bedroom in the basement (which is mostly done already).

This house has the possibility to rent for $1500 - $1800, and only cost me around $60,000 for the purchase. After calculating expenses, it could be possible to receive around $700 in cash flow from this house. Sounds perfect right?

Well, here is the issue. It is a little further away from the campus and it did not get rented out for the 2015-2016 school year. The owner said this was the first year it didn't get rented out, which could mean it was bad luck. However, around the campus there have been two major apartment complexes built which have been getting the attention of students. While they are expensive, and in my own personal college experience, students prefer houses to apartments. I'm thinking that this could result in a trend of the house not getting rented out because of it's location, which would mean the cash flow is meaningless.

Would you take a risk? I know that there hundreds of variables to look at, and it's impossible to make a comfortable assumption with the details I've given you, but any insight would be appreciated.

PS - I do not believe it is walking distance to the campus, it is closer to the college village (where the night scene is) but still not extremely close. It is close enough to ride a bike however.

PSS - I was also thinking of including a parking pass to the tenants so they can drive to the campus and it will be free of charge (costs $60 per vehicle for the pass).