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Updated over 9 years ago on . Most recent reply

User Stats

367
Posts
189
Votes
Jeff G.
  • Investor
  • Wethersfield, CT
189
Votes |
367
Posts

I Want to Acquire Student Housing for My First Hold, But I Don't Know How

Jeff G.
  • Investor
  • Wethersfield, CT
Posted

I really want to get into student housing for my first hold. I've done as much undirected research as I possibly can. Based upon what I'm reading I really think this is an effective strategy and would like pointers on how to get started.

Basically, I'd like to set a respectable property up within 1-2 miles of a University pre-furnished, with made service 2-3 times per week, on site laundry, utilities (including Internet access) covered by me and charge a premium. Ideally I'd dorm two students per room and extract $1,000+ per student in rent.

My biggest open questions are:

  • What are the logistics involved in getting something like this set up?
  • To what degree to I have to work with / be beholden to the local university to be considered student housing?
  • What are the added liability issues?

I've asked some local wholesalers in the area to put me on their buyers list for anything within 1-2 miles of a college or university as a first step. But, that's step one. I'm not sure of step 2. Frankly, I'd almost certainly need a funding partner too, but I think that's further down the check-list than step 2. It's spring now, and I'd like to have something in place for autumn if it's not too late.

Has anyone else done this on BP who might be able to help me get a workable action plan together?

  • Jeff G.
  • Most Popular Reply

    User Stats

    1,870
    Posts
    777
    Votes
    Aaron Montague
    • Rental Property Investor
    • Brookline, MA
    777
    Votes |
    1,870
    Posts
    Aaron Montague
    • Rental Property Investor
    • Brookline, MA
    Replied

    First you have to run your numbers.  You've listed several expensive services.

    $1000 per student sounds good, unless you've just paid $350,000 for a 2 bed SFH. But if you've just purchased a 4 family with 8 bedrooms for the same $350k, you should do quite well with your purchase.

    Run a cost analysis.  There is a solid tool here at BP.  But creating your own is good practice for down the road.

    In addition to the maid service you'll need to look at:

    Taxes

    Sewer and Water

    Trash

    Heat/Utilities

    HOA

    Cap Ex and Ops (my personal minimum is $150/roof/month)

    Insurance

    Mgmt Fee - as a % (general consensus here on BP is 10%. include it even if you think you are going to self manage)

    Vacancy- as a %. (8% represents 1 vacant month/unit/year)

    For each property.

    Student housing is a highly profitable enterprise if done correctly.

  • Aaron Montague
  • Loading replies...