Buying 1st rental in a growing collage town?

Question

I have been reading and trying to learn as much as i can. What advice could you give someone looking to make there first deal in Rexburg, ID. A growing collage town.

Evan Wiesner · Answer

Try to find the house they will move in AFTER college, not the one they want while they are in school. Fewer headaches, longer term tenants, more likely to pay.

Jace Holt · Answer

@Tyler Maher I do not currently have any completed projects I own in Rexburg. I am familiar with the market because have worked on a few larger projects there, managed apartments there, and conducted a market study and analysis using myself and a research team. I have two projects there in the works I plan to complete but are currently placed on hold until I finish some other projects.

Tyler Maher · Answer

@Jace Holt

were did you start with your investments in rexburg?

Jace Holt · Answer

There was no difference between economic occupancy and physical occupancy on apartments I managed in Rexburg. We had a 100% collection rate plus a little additional revenue from late fees. The approved housing renters are virtually no different in reliability and unit damage. Deposits almost always covered damage and cleaning fees. Approved housing allows you to go through a process and block students from class registration or graduation if they steal from you so you have extra leverage to be made whole. As far as collecting rent, just be polite and completely firm with your collections. Set your rules and tolerances ahead of time, and then don't budge an inch. There is a significant amount of entitlement you need to be prepared to stand up to.Occasionally students or their parents will call and try to insult you or bully into giving them rent free housing. Surprisingly, even parents of married students tried this. (Or they feel their child isn't being treated right, they will show up at the child's apartment at 7AM and rampage through the unit and throw a tantrum and make you call the police on them. Story for another day.)

Per square foot, family housing is roughly 50% as profitable. This reflects on property prices of land inside the approved housing boundary which I have seen as high as $2.4M per acre. This means that the ROI from creativity in deal finding paired with larger investors favors the approved housing investor. It will be more profitable and simple to buy married housing as a smaller player.

Tyler Maher · Answer

@Jace Holt

i really want to stay in the married housing side. thay tend to stay longer and are better renters. but dealing with people renting on student loans seems like a house of cards when it comes to stability.

Tyler Maher · Answer

@Eric Mitchell

i realy like the house haking concept. i have a friend who owns a duplex that me and my wife have been going in behind renters, clea

ning and doing repairs, then finding new tenants ( usaly a year lease). he offered to go help invest in a 4 plex if i found one.

Jonathan G. · Answer

Jace really assembled all the smaller parts of the college market into the whole picture for you.

There can be lots of wear and tear on the units as the kids tear things up into little pieces pretty quickly.

There was a recent post about renting to college kids and it can get pretty sticky but essentially, it seemed profitable and the post really laid out the big-picture college rental experience.

Jace Holt · Answer

@Tyler Maher There are three main categories of rentals in Rexburg. "Approved housing" which represents approximately 70% of the market, traditional housing (locally referred to as community housing or family housing) which represents approximately 25% of the market, and unapproved roommate-style housing which I would guess to be around less than 5%. If just starting, you will want to go if possible with the smaller two segments. There are so many rules to getting school approved housing and the university prefers larger projects.

Eric Mitchell · Answer

Rexburg is a tough place to find a good cashflowing property. The rent rates are very good though, also the vacancy rates are good. Are you looking to house hack, or what do you have in mind?

Buying 1st rental in a growing collage town?

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