How to Turn a 3 bedroom home into a student rental

Question

Hi

looking for some input. I own a 3 bedroom home in a nice neighborhood . Centrally located in a college town. Similar houses in this area have been converted to student rentals. The area is not oversaturated. My 3 bedroom house has off st parking  with 3  large yards.  Its a 5 min walk from Mercyhurst College and about a 10 min drive from Gannon University And Penn State Erie  Behrind College.These are the 3 largest colledges in Erie pa.  Im thinking this puts  this property in a prime location for a colledge rental.

Im currently having the property renovated. should be ready in a week. I  Was renting to a guy and girl.Gave them a discounted rent rate in return  They trashed my place. lol surprise surprise!

Im figuring if theres a chance its going to get trashed . I might as welll go for the higher student  rents.

What would the checklist for a successful student rental look like? Some resources in that area? Thanks for any input!

Charge Rent per room?

Have there parents co sign lease?

Have tenants pay for some kind of renters insurance?

1 or 2 months security deposit? (In case theres serious damage done)

A reputable and qualified Property Manager in Erie,pa that specializes in student rentals?

Should utilities (gas,electric,water and trash) be included in the rent or get the utilities put in the tenants name? In general The gas bills up north can get high in the winter.

Any thing else that should be on my list?

Patrick Liska · Answer

Okey,

1.you charge rent by the room, but a lot of times you will get a group of students wanting to share a house.

2. I would hire a qualified PM to manage the property, it can be a pain with college students, i have had some pretty good ones in mine so far. ( note: check agreement with PM usually they charge a leasing fee to you, lets say $300 for each lease agreement, group of 3 students is one lease, 3 individual students is 3 leases or $900, make sure you have in your agreement that if they get a group it can be 300 but if its an individual maybe 125, this prevents them from getting single students and costing you a fortune.)

3. definitely have them get renters insurance and make sure your PM has that on the lease agreements.

4. in PA you can charge 1 1/2 months security deposit, i know my PM charges 1 month

5. do not know of any in Erie, sorry

6. rent should be based on the area and your PM will know better on that. my Student rentals, i include heat( sometimes you can set a limit and then have them pay the overage), sewer/ water, garbage, lawn maintenance/ snow removal and internet. they pay for Electric ( stove, dryer and hot water heater are electric.) i include the internet because it helps rent them and i can control the thermostat on all of them and front door lock on one of them.

you are just finishing up your reno now, but if you invest in another student rental, use 5/8" drywall on the walls, harder for them to damage, plus gives you better fire protection.

Karl B. · Answer

I have a few multi-family properties in Erie and am closing on another on the 31st (as long as the inspection report isn't a nightmare scenario).

I'll answer your questions below:

What would the checklist for a successful student rental look like? Some resources in that area? Thanks for any input!

Charge Rent per room? Check comps. I primarily check Craig's List to compare rental rates. You can view as a map to see which locations are closest.

Have there parents co sign lease? Heck, yes! Always. And if they tell you their parent has poor credit, have them find another willing co-signer (grandparent, aunt, working older sibling, etc.)

Have tenants pay for some kind of renters insurance? It depends on the area. If I had a property near LeCom and knew renting it out would be a non-issue. Most of my renters are not students - simply people living paycheck to paycheck. It's a call you'll have to make. There are lots of convos on BP regarding it and it's definitely a choice to consider.

1 or 2 months security deposit? (In case theres serious damage done) One month should be sufficient.

A reputable and qualified Property Manager in Erie,pa that specializes in student rentals? Finding a good property management company in Erie is tough. I have a friend who owns numerous properties and does property management. I never worked with him real estate-wise but he's a good person and is a successful RE investor. If you want his contact information, message me. I can also tell you a PM company I dealt with who sucked (I bought a 4-unit they were managing and the PM kept making mistakes - including failing to show up when we had scheduled a construction worker to check the place out and give the seller a quote).

Should utilities (gas,electric,water and trash) be included in the rent or get the utilities put in the tenants name? In general The gas bills up north can get high in the winter.      Since each of my units have separate meters the tenant pays gas and electric and I pay water, sewer and trash. If possible, have separate meters, especially for gas.

Any thing else that should be on my list? When marketing your units/rooms definitely join the Erie, PA stuff for sale/real estate groups to market your places. I also recomend cozy.co, Zillow Rental Manager, Trulia and Craig's List.

Account Closed · Answer

Honestly, just learn how to screen your tenants. That's what went wrong with your last tenant.  Screen well, be really picky, have tough criteria, and you're good to go.

Students will be a PITA - I rented to students for many years in Silicon Valley.  I rented studio apartments.  Dealing with roommates is a giant hassle, and students are even more likely to wreck your property.

Whether you choose to rent to families or students, though, you need to hone your criteria and your screening process.  That's the key here.

Adam M. · Answer

Having lived in a college town (Lawrence) for 8 years every PM asked if you were a student and mandated parent cosign on the lease if you were. Ask if the parents are paying and get whoever is paying on ACH. Don't want to have to wait on the student to ask the parent to write them a check. I've seen roommates do that circus. My current LL rents per bed and a lot of the fully furnished student apartments do the same but I've seen both. I'd market to grad students / alternative students (older, has kids, etc.). I know I got into shenanigans when I did my first undergrad but all the older people in my classes now it is night and day between actual undergrads and us.

John Mocker · Answer

Okey,   One thing you should check into is the Insurance on the property.  We represent over 2 dozen different carriers and the ones that write 3 families all will not write student housing.   If that is the case with your policy, you need to know the cost to cover it with students.   If you are told that you do not have to disclose that fact, you should consult an attorney that is familiar with Insurance law  to be sure.   I would still get the quotes for the coverage with students so you know what will happen if you have to change carriers.

Before you decide to charge per room, you should explore what that will do to the Insurance rates.  As with Student rentals, rooming houses are a problem and generally a higher rate.

Regardless of whether you have to get a new policy, I would recommend increasing your deductible and using the savings to fund small repairs.  The worst thing you want is to have multiple claims in this situation.   The advise about getting the tenants to buy renters Insurance and to have their parents co-sign are both good ones.

Chris Wakley · Answer

I'm not exactly qualified to give you a professional opinion on this but I would tell you to make sure you screen your tenants very carefully. Make sure you don't just rent to the first person that comes along unless they fit your criteria. I currently rent to 3 Gannon students and they are GREAT. I charge them fair market rent (not higher bc they are students). It's a 3 br in downtown erie I charge $650/month.

They pay Gas/Electric and yes the gas bill can be very high during the cold months. I would 100% recommend at least putting the gas/electric in their names so they don't take advantage of you.

Renter's insurance is always a good idea and some Landlords even make it mandatory on their lease.

I do not know of any property managers in the area but I haven't looked as I only have one property right now.

I would also highly recommend checking out The Book on Managing Rental Properties by Brandon Turner. Incredible book.

How to Turn a 3 bedroom home into a student rental

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