renting in college towns

[Joy Mendenhall]

Hi everyone:

FIrst thank you to all who post and mentor those like myself who are new and ambitious to achieve our financial goals through RI. I was wondering if anyone could provide some insight into college rentals. I am looking into a few properties located near my alma mater (I thought this would be a good place to start as a newbie). I don't necessarly want to take on a huge rehab project as I am inexperienced and live out of state. Any expriences or thoughts are appriciated. thanks in advance, Joy.

[Account Closed]

I managed a 26 unit building next to a university.  You can search my posts for lengthy advice LOL.

If I was looking to buy to rent to college students, here's what I'd look for, after learning for 8 years:

Buy or convert a building to small studio apartments.  You won't have to deal with roommates, except BF/GF, or large parties.

Use only month to month agreements.  Easier to get rid of problem tenants.  If you end up with vacancies over the summer, advertise to summer interns for a higher monthly rate.  There is a market for this and they will love you if you are cheaper than the local extended stay hotels.  I learned I didn't have to worry about renting off-season.  There are always students looking for housing rear-round.  Not all students start in the fall.  And those looking for housing for winter quarter are thrilled to find you.

Only advertise to grad students, preferably law students.  I've heard med students are great, too.  See if you can advertise on the law school web or facebook page.  Get them in their 1st year, and they will probably stay with you for 3 or 4 years.

Allow them to sublet over summer.  I gave them written permission for a long-term guest over summer.  Original tenant stays responsible for rent.  What they do between them as far as money is their deal.  I didn't get involved.  If guest causes problems, they and original tenant gets 30 days notice to move (another reason for M2M agreements).  This is also how I dealt with BF/GF who move in and out.  I gave original tenant written permission to have the BF/GF as long term guest.  It makes it easier for them to break up and move the GF/BF out, without the original tenant having to move out because they're both on the lease.

Don't accept parents as co-signers.  Verify they are students in good standing and do background/criminal/credit checks, but only put the student on the lease.  Co-signers are worthless really.  They don't guarantee a problem-free tenant.  Sure, you can sue them after the fact.  But, you don't want to have to sue someone after you evict your tenant, right?  So, just rent to the tenant and let them get money from Mommy.  I wanted tenants who were responsible.  I don't want to deal with their Mommies.  Another reason to have M2M agreements.  Just give them notice to move, if they are a problem.  Legally, every time you give any kind of notice to your tenant, you also have to give a notice to their co-signer.  Then, you're on the phone when Mommy calls and wants to discuss the notice.  They take twice the work.  Plus, they'll call you and want you to tell them what junior is up to.  Trust me, I learned the hard way that co-signers are more work, and no guarantee that a tenant will behave.

I would not buy a large home and rent to a bunch of roommates who are all on the lease.  Pain in the butt.  Some will move out, some will stay, new ones will move in.  They will argue over deposit, rent, and everything in-between and expect you to get involved in their drama.  Maybe that sounds like fun to you, but not to me.  If I had to buy a large home as a rental, I'd rent it to law or med students, I'd rent out separate rooms, with separate month to month agreements, and hire a cleaning service.

Good luck!