First Deal by a College

[Samuel Whelan]

Hi all,

I've recently switched careers and moved back to CT, so I'm on the hunt for my first property. My goal is to purchase a MFH with a good bed to bath ratio and instead of renting by the unit, rent by the room. The properties I'm looking at are near a decent sized college so there are plenty of students. I plan on being the landlord myself for the first year to gain experience before switching the property over to a manager. I know college students can be bad renters if I'm not careful, so what precautions/stipulations are a necessity for this type of renting? I'm very excited to get started on this project, but want to make sure I don't dive in over my head and get burned right out the door. Any advice or help would be greatly appreciated!

-Sam

[Adam Litton]

Sam, congrats on your move and looking for your property!  I too have been thinking of investing near a college town.  Great idea to manage the property yourself first.  As you probably know this helps you when picking a property manager and developing guidelines for them.

1. If you are looking into the strategy of rent by room... ensure you are in a market or area that this can work in.  Some areas this simply will not work.  Other areas work very well.  There is a BP podcast, do not recall the episode number where the guest has the rent by room strategy.  

 2.  Dynamics of the people living with each other in your rooms.  How do you go about the housing atmosphere and the different types of people that would be living there, or "you just get what you get when you apply".  It is important to some that they are similar in lifestyle to their roommates.   You probably don't want to create a living environment where you are going to get a ton of complaints from tenants where they don't "clean out the bathroom sink, or Bob keeps throwing random parties.  Some additional research into what others are doing may be beneficial to your plan.

3. Have you thought about other options (back up plans) such as air BnB?  Parents and visiting friends and family of students usually need a place to stay.  What if just a traditional rental, what are your numbers?  Map out (Excel spreadsheet) the potential backup plans for each property you look at.

4.  When running numbers add in additional repair costs.  I was a college student and I remember some of the get togethers and parties I went to.  The houses took some abuse.  Even with a stipulation on the lease of no parties, .. these are students and they love social interaction.  It will happen. 

I wouldn't put anything expensive in, but doesn't mean it doesn't have to look terrible..  Example LVT flooring is a great option that takes some abuse.

Feel free to connect and would be glad to discuss in further details and share ideas on college town investing.