Single Family, Duplex, Triplex, or 4-unit Apt in College Town

[Kem M.]

Hello!

For context: I am looking to purchase property in a smaller division II college town (student population ~6,500, has post graduate courses). The town itself has~11,000 people. Apartments and homes are averaging $250-$350 per room, and appear to cap out around $1,300 for a 5-bed.

My question is regarding property types. I have several options who all APPEAR to have similar ROIs. So, in general terms (and keeping in mind this is predominantly a college rental town) what would be the advantages/disadvantages of the following properties:

1. Triplex / duplex (3/1 & 2/1, $140-165K purchase)

2. Single family house with 4-5 bed/2ba ($75-105K purchase)

3. A 5-unit apartment (located on main street between two bars, 5/2, 4/2, 2/1, 4/2, 2/1 for $240k )

Do you recommend investing in a town such as this where turnover rate is so high and the population itself is sparse? Is it possible to own these without a property manager if you live out of state? Thanks for reading!

[Peter Mckernan]

Hello @Kem M. 

Typically commercial loans are great to use and if you need to utilize a commercial loan many banks small and large can facilitate that especially with a deal like the 5 unit. Check out some different lenders in the area and see what feedback and what types of rates you can get.

I had two rentals in a college area. I just sold one, which had college students in the rental and when they moved out the property was the same as when they moved in. The other rental in that same area has a family in it and has been there for three years, which is great! All I suggest is keep your standards a little higher for college students (i.e. make sure parents co-sign the lease, and have a strict set of rules).