College rentals and the 50% rule

[Bob Oliver]

I have rented to students in Williamsburg for 10 yrs now. Fortunately, I lived 3 blks from the college (Wm&Mary) and bought near my house until it too became a rental 5 yrs ago. I am fully leased 6 mos prior to lease starts in 6 properties with 8 units, so essentially I have zero vacancy and always have had. Leases run 6/1 to 5/31 with sublets allowed. Knock on wood, I have had few serious problems with students. I read them the riot act about partying, they pay on time, appreciate the opportunity to live off campus, and we generally get along fine. Most of the problems are with being messy but they clean up before they leave or lose the deposit. i manage all the properties and we pay ourselves.

My question is: is it a stretch to consider the 50% rule to actually be closer to the 35-40% under these circumstances or is the reality that it is 50% over the life of the investment pretty much no matter what?