College Rental Leases

[Steven Scheer]

Howdy, good people. In the next few months, I will be purchasing a duplex to rent to college students. I was wondering if the people of BP that rent to college students either charge a predetermined rent (say, $1,000 per month) or do you charge per bed (say $300 per bed, per month for three beds OR $250 per bed, per month for four beds)?

Be blessed!

-Steve

[Daniel Hyman]

@Steven Scheer My clients in Madison have an old frat house that was rehabbed. They Have studios and 2 bedroom apartments. All are rented out by the unit. Good luck on the duplex purchase!

[Steven Scheer]

@Daniel Hyman, thanks for the advice! Madison has to be a very lucrative market. UW has to be a gold mine.

[Kaleb Carsten]

I've seen it done both ways. But I'm planning on doing it by the predetermined rent that way my income is the same regardless of one of the students decided to move out early.

[Steven Scheer]

Thanks, @Kaleb Carsten! I was thinking the same thing. I just read in a book that some folks do the charge by bed approach.

[Brian Head]

When I was a student living in the downtown area I only recall apartments, duplexes, houses etc. for the unit at a monthly rate.  

From my evaluations, college student ROI is tough around Milwaukee area campus due to the high cost of entry and taxes. I ended up going SFH route, there are great pocket areas in Milwaukee County. Good luck on your adventure - keep us updated!

[Steven Scheer]

Thanks, @Brian Head! I'm actually looking the Waukesha area for now. I'll invest in Milwaukee when I have some more experience.

[Account Closed]

Well, you're from Milwaukee, and I'm not as familiar with that market. Hopefully Madison can relate.

As for madison: I graduated recently, and student housing rents by the unit. However, it isn't uncommon in the core downtown area to add a "double-occupancy fee"... where if 2 people share a bedroom, there is an additional fee. It used to be $125, but might have increased to $150 per double occupied bedroom.

I will add - that was primarily for apartment complexes in the epicenter of student housing. As it branches out more, i don't know. As it turns to working-class housing, the double occupancy doesn't apply. I don't know about the 1-4 unit homes around UW campus. 

[Paul Haviland]

I have quite a few units that are rented by students. 95+% are rented out per unit. I will however charge a $13-$16/person for water. Thus, if there is double occupancy, the ultimate gross is higher.

Also, I have 2 units that I rent out per bedroom (3 & 4 bedrooms/unit). This is quite a bit more intensive when leasing, but I've found that I can squeeze maybe 10% more rent that way. For example, the 3 bedroom is probably worth 1300-1400/month, but I'll rent it for $500/room ($1500). For the individual renters, it is nice because it is much cheaper than any 1 bedroom/efficiency they could rent on their own.

Cheers,

Paul

[Nathan Schoenborn]

At my rentals in whitewater, I try and usually get rent by the semester as it's usually paid with financial aid or by the parents. It's a good opportunity to get a large chunk of money at one time. 

[Steven Scheer]

Thanks, @Account Closed I went to school at the UWW and I  remember that every home I lived had that same lease structure. Does DLK Enterprises still control most of the real estate in Whitewater?

[Paul Haviland]

Occasionally, yes. I've found most people who want to rent a room in a shared space are generally respectful and keep to themselves... unless they don't. I've had a few bad experiences, but not often.

I've actually had good luck by having one of the tenants who is renewing be in charge of finding the new ones. That way they can find a good fit. I'll normally give them a timeline of a month or so before I step in (they still have to meet my rental criteria).