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Updated about 5 years ago on . Most recent reply
Student Housing House hack
Hello - I have a daughter that will be going to college in the fall and I'm looking into investing in student housing as a house hack of sorts to invest in real estate and reduce the cost of student housing for her in the process. We're 95% sure she'll be in school in the Provo/Orem UT area so that is the market I'm looking at.
I'm thinking of purchasing a condo which she would live in and then we would rent the other rooms. It seems that you can rent by the bed or by the room depending on how you price it.
I'd appreciate any input on condo ownership, student housing, etc.
This will be my first investment in real estate. But I want to do more in the future, not necessarily related to student housing. Thanks in advance for any advice.
Ryan
Most Popular Reply
Buy low, sell high; with the asset paying its bills in between @Ryan Mattson. Or maybe to break even, in your case. I read that Provo is growing, which is good. Lenders will say 'yes'. One must find a deal, which means that the rental income pays the bills (mortgage, insurance and taxes) and has enough left over to make repairs and replace water heaters, or other capital repairs which arise during ownership. Growth also has an appreciation factor, so you may be able to overlook a thin cash flow because appreciation may make up for it, by the time your ownership term ends. It is a risk. Gather the rent rates of both 'by the bed' and 'by the room' and see if the numbers make sense. The plus of student housing is that parents may co-sign the lease, if you do it right.
What I have no stomach for is a 'condo' as an investment. Condos have expenses that are decided upon by a committee. This is an unknown factor when assessing the expenses of an investment because it is out of your control. If you scrutinize the latest improvements of the building - roof, windows, paint, parking pad, tree cutting etc. and guess that you may avoid costly assessments of the Board during your time there, and are prepared for the unexpected, go for it.