What has your college rental experience been like.

Question

Looking into college rental market that will cash flow approximately $450/month for a 5 bedroom duplex with an asking price of $80,000. This is in Wisconsin mind you, hence the cost. The property is in very good condition as well.

So I'm wondering what your experiences have been like, and some pros/cons to the college rental market. I'm looking to provide high quality, not be a college slum lord.

Thanks for your feedback.

Colleen F. · Answer

Our experience has been alright.  I think every college rental area has a model or some standards it follows.  In our area there are 9 month leases and they start the day after labor day to mid may. Other areas it is year round.  We have limits on unrelated people so max 4. They have some other regulations in town that target partying.  There are areas the students like to live in, areas known for partying and areas they never live in.  Typical issues are partying, putting out the trash, and  understanding heat. Pros: I generally like them. They don't call a lot. If you don't like them they are gone quick.

Cons: turnover, cleanliness, more police issues, you need to be more active in the community to try to keep your ability to rent clear of town restrictions.  one party= major news =  all students are bad.

Kyle Mccaw · Answer

I prefer not to invest in college rental. A few reasons below:

1) college rentals turn over almost ever year - Ilike my tenants to stay forever.

2) if you miss getting a tenant during the leasing season you risk have a long vacancy

3) my experience has been college students are hard to get $ from. Make sure to get the parents on as co-signers

4) college students can be helpless. think, air filters, mowing, watering yard, roommate issues, etc.

5) some students can be kinda rough on the property.

6) many REITs have gotten into the business of renting out resort style housing in my markets. It's hard to compete with the deep pocket companies.

Michael Boyer · Answer

I have had several good tenants in college.

But I would not call them traditional students (i.e., not 18 year-olds away from home for the first time). Nor was a I offering "college rentals" per se.  See more below.

Colleges can be great economic engines, very sustainable, delivering new and returning tenants every year. Sounds like you see a niche, with the UW campus, Lakeland and the technical college all nearby.

That is a major pro--continuous demand for student housing (many colleges do not have enough on campus housing and/or students prefer nearby off campus options).

One big con, of course, is working through the summer vacancy. Many students may want a 9 month lease or so. So you may have the annual exodus and turn over. Turn over=work. So if you can get longer term, more stable renters--all the better.

My best "hack" for avoiding both the summer month vacancy and the traditional student/18 years olds (who may need more attention/supervision than I can provide) is to consider the non-traditional year round student. Think more broadly about students.

It may be someone who is older, has a family,  works full/part time, maybe even employed at the university, on the GI Bill, etc. Basically adults who happen to be going to college. Even consider those that work at the university, as faculty, staff, grad students, etc.

Marketing to them with the one year lease could help (as those leaving in summer may avoid your ad). I would not use the exact same advertising methods or message used for traditional students. And maybe try and sell that the larger units are better for families (which may be less stress for you than, say, a half dozen nineteen year olds).

There may be some of these folks that will welcome a larger, higher end duplex, and getting away from the  louder party scenes that can be present in some college rentals.

Best of Luck!

Derek Loda · Answer

I really started looking into this niche after seeing what my girlfriend pays for her apartment and compare that with the lower unit and purchase price listed in records. There are three primary areas that provide a high demand and high rent for the market. My one concern is of course the risk of irresponsible college kids, but due diligence should help prevent it in screening.

Jeff Keller · Answer

What our team leader does is make the students find their own room mates. They have to pay whether every room is occupied or not. She doesn't get involved in the drama between students not liking each other. All students sign a joint lease. If one skips out without paying the others have to pay. It has worked out well for her.

We are in an area where it is hard for students to find housing. Vacancies are not a problem.

Matt R. · Answer

I don't have any experience doing college rentals as a landlord.  My other half has experience being a tenant in a college town in Iowa.  The thing I noticed was that the city regulations on rental property / landlords seemed to be more in tune with a big metropolis than a town in the middle of corn fields - in other words, more extensive than you would expect.  Nothing particularly onerous, but it was more involved than just putting up a "for rent" sign in the yard and cashing the checks.  :)

My *guess* is that at one time, there were people trying to make a fast buck by putting 10 college students in a 1,000 square foot house, so the city cranked up the regulations in an attempt to prevent that.  Probably a good idea to check into what the city requires before buying.

Matt R.

What has your college rental experience been like.

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