multi family in College Towns

[Joseph Bierniak]

Does anyone have any thoughts on a strategy of buying multifamily units located in college towns, is the steady rent worth the issue of having to deal with the college renters?

[Ron Averill]

Many universities have a "student ghetto" area that is next to the campus and usually near the bars. These areas can require some advanced management techniques and hardening of the properties. Those owners that do it well are very successful. It is important to know what you are getting into when you buy in these areas. 

We have some properties just outside the boundaries of a student ghetto. The rent is slightly lower than in the core of the ghetto, but the caliber of renter is better. For these properties in particular, we have found that students will take good care of a home if they feel that the landlord really cares about both the student and the property. Most students are really good tenants, and they are even better when the expectations are clear and the tenant-landlord relationship is built on mutual respect. 

Students are naturally naive and often lazy when it comes to taking care of a house, and even the best student tenants may not keep the place clean. But underneath the piles of dirty clothes and empty beer cans, we have not found much deliberate damage.