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Updated over 9 years ago, 04/30/2015
How can I find reliable numbers on what students are paying for rent.
I am looking into buying property near Florida State University. I have heard a lot of people say that students pay significantly more than single families do. When I am looking into what single family homes(non student) rent for I use sources like Rentometer. I do not know how to get accurate comps on student rentals because it doesn't seem like the rents shown in Rentometer reflect student rentals.
I am also concerned about having vacancy in the summer months when most students are out of school. Is there a way to mitigate against this?
Any advice would be appreciated.
Thanks
Do some digging into the leading prop management companies in the area that cater to students and inquire into pricing for different student housing options. That shld get you some information on rent prices. Most of them will also tell you they lease from August 1 on year round leases, so the students pay for summer whether or not they're staying for the summer.
Thanks for the advice. Never thought of the property management angle.
Hi,
I also live in Tally. Having been a student here, and newly minted investor, you should be able to easily find comps based on a variety of different methods. First (especially since it's April and all landlords are looking to fill their properties with leases that will be up in July), drive around campus and look for "Rent" signs on property and start calling and asking how much they charge. Second, I'd check out Craig's List. From a timing perspective, you are fortunate that everyone is trying to rent for next school year, so collecting rent comps should be easy to come by.
I'm curious to see how long the college debt bubble will last. Check out this website Mark Cuban owns..... collegedebt.com
Frank
@Johb White here are a few ways to mitigate summer vacancies.
1 -Ddivide residential space into "storage" space for students going away for 3 months. You're basically creating a non-accessible mini storage for students. If you can get multiple student customers, then you can really get your gross up.
2 - Reposition to a furnished apartment. Work the sublet angle. There is always someone needing summer only housing. Return to unfurnished during the school year - if that makes sense.
3 - Airbnb your furnished units during the summer. Switch business models for three months. You don't need a lot of furnishings - go with a minimalist theme.
That should be some food for thought. Best to you.
As far as summer months, you could also allow summer subletting, with approval.
I only rented month-to-month, in a building next to a university in Silicon Valley. What I learned about students and summer, is that graduate students are more likely to not want to move over the summer. I targeted law students, but most grad students won't want to move over the summer. But, they may leave for the summer for internships, usually. So, they'd want to sublet their apartments.
How I handled this, is I would give the original tenant written permission to have a long-term guest for the summer. I told them the original tenant was still responsible for the lease, and the rent. The written permission said that the "guest" will be evicted if they cause problems. I would usually meet the "guest" and make sure they knew my phone number and to call me for any maintenance issues. They'd usually want to be sure they are there with permission, too, and that the tenant has the right to rent to them. The written permission covered that, so they could feel confident it wasn't a rip-off, etc.
Then, the two students would write up their own agreement for the subletter to pay the original tenant. I didn't get involved in their agreement at all.
What I found, was there are a lot of students from other colleges, who come for summer internships. There will also be grad students who live on campus, who need somewhere to stay for the summer and they don't want to go "home" to mom and dad's.
So, there is a short-term summer market. But, the ideal way to rent to them, is to not lose rent in-between one moving out and another moving in. So, subletting can actually work with students.
I also learned that the summer students will pay a higher price, because it's nearly impossible to find affordable (cheaper than a hotel) short-term housing. I had tenants tell me they actually made a profit subletting for the summer LOL. I had no problems with any of the summer "guests."
Oh, also see if there is a housing website for the university. The one I rented next to, had a housing website for students, where landlords could list their rentals. The students also use it to list sublets, and to post wanted ads. If there is such a website you can access (some are for students only), that would be another place you could check the going rental prices.
Thanks to everyone for the advice, I feel well informed now. I really like the creative suggestion that Al Williamson gave
"1 -Ddivide residential space into "storage" space for students going away for 3 months. You're basically creating a non-accessible mini storage for students. If you can get multiple student customers, then you can really get your gross up."
This may not be the ideal scenario but it is a great fall back that I never would have thought of.
Originally posted by @Johb White:
Thanks to everyone for the advice, I feel well informed now. I really like the creative suggestion that Al Williamson gave
"1 -Ddivide residential space into "storage" space for students going away for 3 months. You're basically creating a non-accessible mini storage for students. If you can get multiple student customers, then you can really get your gross up."
This may not be the ideal scenario but it is a great fall back that I never would have thought of.
Why would storage space be better than a regular rental? I don't get this thinking at all. Is it rented or isn't it?
There is a huge market for summer sublets next to universities. Many students have summer internships and it's really hard for them to find short term housing.
How do you evict storage unit tenants? Why would that be easier? I really don't understand how renting your units out as storage would be more beneficial. Are there different rules for storage units? Do you then say nobody can sleep there? How do you police that?
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Originally posted by @Account Closed:
As far as summer months, you could also allow summer subletting, with approval.
I only rented month-to-month, in a building next to a university in Silicon Valley. What I learned about students and summer, is that graduate students are more likely to not want to move over the summer. I targeted law students, but most grad students won't want to move over the summer. But, they may leave for the summer for internships, usually. So, they'd want to sublet their apartments.
How I handled this, is I would give the original tenant written permission to have a long-term guest for the summer. I told them the original tenant was still responsible for the lease, and the rent. The written permission said that the "guest" will be evicted if they cause problems. I would usually meet the "guest" and make sure they knew my phone number and to call me for any maintenance issues. They'd usually want to be sure they are there with permission, too, and that the tenant has the right to rent to them. The written permission covered that, so they could feel confident it wasn't a rip-off, etc.
Then, the two students would write up their own agreement for the subletter to pay the original tenant. I didn't get involved in their agreement at all.
What I found, was there are a lot of students from other colleges, who come for summer internships. There will also be grad students who live on campus, who need somewhere to stay for the summer and they don't want to go "home" to mom and dad's.
So, there is a short-term summer market. But, the ideal way to rent to them, is to not lose rent in-between one moving out and another moving in. So, subletting can actually work with students.
I also learned that the summer students will pay a higher price, because it's nearly impossible to find affordable (cheaper than a hotel) short-term housing. I had tenants tell me they actually made a profit subletting for the summer LOL. I had no problems with any of the summer "guests."
Graduate law or medicine students are quiet and driven, MBAs are partners and loud:)
Originally posted by @Brian Gibbons:
Originally posted by @Account Closed:
As far as summer months, you could also allow summer subletting, with approval.
I only rented month-to-month, in a building next to a university in Silicon Valley. What I learned about students and summer, is that graduate students are more likely to not want to move over the summer. I targeted law students, but most grad students won't want to move over the summer. But, they may leave for the summer for internships, usually. So, they'd want to sublet their apartments.
How I handled this, is I would give the original tenant written permission to have a long-term guest for the summer. I told them the original tenant was still responsible for the lease, and the rent. The written permission said that the "guest" will be evicted if they cause problems. I would usually meet the "guest" and make sure they knew my phone number and to call me for any maintenance issues. They'd usually want to be sure they are there with permission, too, and that the tenant has the right to rent to them. The written permission covered that, so they could feel confident it wasn't a rip-off, etc.
Then, the two students would write up their own agreement for the subletter to pay the original tenant. I didn't get involved in their agreement at all.
What I found, was there are a lot of students from other colleges, who come for summer internships. There will also be grad students who live on campus, who need somewhere to stay for the summer and they don't want to go "home" to mom and dad's.
So, there is a short-term summer market. But, the ideal way to rent to them, is to not lose rent in-between one moving out and another moving in. So, subletting can actually work with students.
I also learned that the summer students will pay a higher price, because it's nearly impossible to find affordable (cheaper than a hotel) short-term housing. I had tenants tell me they actually made a profit subletting for the summer LOL. I had no problems with any of the summer "guests."
Graduate law or medicine students are quiet and driven, MBAs are partners and loud:)
This was true for me, too! For some reason the MBA students also didn't stay long-term.
I should say that my experience with engineering students - even undergrads - were also very reliable and quiet tenants. The ones I had did go out and party, but they did it somewhere else. They're smart :-) But, they weren't as long-term as my law students. Didn't have a medical school at the university next to me, but I heard they're great, too.
i know college town properties rent well, but the creative thinkers at BP take it to the next level. This newbie investor is llearning new things everyday! Thanks everyone!
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One phone call to the college Off Campus Housing office will have all the answers. Where do the students want to live what are they paying, what is included do they advertise for housing in the office.
A buddy does it. Controls 130 beds 71K mo 50K after expenses. She rents per bed not unit, includes cable internet and utilities. She gets 2-4 times more rent than conventional. She uses auto deduct, has parents guarantee and keeps them out of the basement.
Paul
@Account Closed you've got to pardon me. My mind doesn't always work along a straight line.
Here's the potential business model for summer storage:
1 - take a unit that your tenant wishes to vacate for three months
2 - charge that resident a storage fee of $100/month with a no access terms.
3 - set up no access 3-month terms with others.
4 - If storage tenants haven't pick up there belongs by a certain date - you hold a back to school yard sale.
This is just a concept; I do not have a case study to refer you to. The mechanism with lien laws are different than landlord tenant laws. Lock out and sell off is permissible as long as you follow your local county guidelines.
Storage could be better than a regular rental because you could pack in a lot of clients, need not worry about utilities or maintenance calls, get paid up front, and create a niche opportunity that might give you an edge in a college community. Essentially the landlord could take 3 months off.
Hope that helps expand the options that could be considered.
Originally posted by @Al Williamson:
@Account Closed you've got to pardon me. My mind doesn't always work along a straight line.
Here's the potential business model for summer storage:
1 - take a unit that your tenant wishes to vacate for three months
2 - charge that resident a storage fee of $100/month with a no access terms.
3 - set up no access 3-month terms with others.
4 - If storage tenants haven't pick up there belongs by a certain date - you hold a back to school yard sale.
This is just a concept; I do not have a case study to refer you to. The mechanism with lien laws are different than landlord tenant laws. Lock out and sell off is permissible as long as you follow your local county guidelines.
Storage could be better than a regular rental because you could pack in a lot of clients, need not worry about utilities or maintenance calls, get paid up front, and create a niche opportunity that might give you an edge in a college community. Essentially the landlord could take 3 months off.
Hope that helps expand the options that could be considered.
Interesting idea. Thanks for explaining :-)
I'm wondering why nobody has talked about renting only for the school year? I'm not inclined to pay for a whole year's rent when i'm not going to be living there for 3 months out of the year. Why couldn't you just divide the 12 monthly payments into 9 payments? That way the tenant doesn't feel like they are paying for something they are not using, and you get to have a stable income (provided you take a portion of that rent check every month and set it aside for the 3 month "vacancy" period to cover your costs).
In the case where people rent for the whole year, how do you handle security deposit? When they move back home for the summer, do you give them their security deposit back? do you wait until they return to school and then give them their securit deposit back or do you just hope that they will renew their lease and then you just hold on to it again?
Thanks in advance.
There is usually a per bedroom average in student rental areas. In any case that is what I have seen in our area. We only rent for the academic year so if they are not coming back you return their deposit like a regular tenant. That works for our area because there are other renters in the summer. In Florida it may be usual to just have them rent for the calendar year, many areas function on that model. Student rentals in our area are normally furnished but there are other areas where unfurnished or partially furnished works. You furnish the common area in the basics and they bring their bedroom furniture. Check out the off campus housing to see what the terms are for rentals listed on that website, that may give you a idea of what is normal for student terms in your area. I would not bank on students paying more. It all depends on area and what is available. If you are where the students want to be yes, but not always.
I have a friend that has several college apartments in the Upstate NY area and he was able to price point the vacancy months and add that to the monthly rental income. I dont know if that is possible for you or not in Florida. Rentometer.com is a good starting point for rental units as well.
