Which do you prefer? Student Rental vs Single Family Rental

Question

Hello BP! Glad to be here...looking forward to connecting. I am looking for a second investment property. I was thinking about student housing (renting rooms). Does anyone on BP already do this? What is your experience?

I currently rent my condo to a single family. Which experience do your prefer?

Thanks!

I currently rent my condo to a single family. Which experience do your prefer?

Thanks!

Dave Visaya · Answer

Hey @Michelle Nelson welcome to the site! Cool idea. I believe one of the shows in the podcast has this kind of rental. I believe it was the one with Glenn McCrorey (not 100% sure). Nonetheless, check out the podcasts - they're awesome!

Michelle Nelson · Answer

thanks @Alex Chin good points!

Alex Chin · Answer

Feel free to ignore this if you've already given it some thought, but I would be prepared to change up my screening process.

Students tend to not have much, if any, credit history and you'll probably need to have the parents stand in for that lack of credit/income. Plus I would charge a hefty security deposit because kids destroy housing.

Michelle Nelson · Answer

Thanks @Joseph Sherer I never considered the law regarding relatives vs. non relatives. Great advice!  Perhaps SFH rehab vs a turnkey?

Joseph Sherer · Answer

@Brian C.

Great ideas.

@Michelle Nelson We do student housing and feel it offers better return without too much more headache for that area of town. Some things to consider:

• Laws in the area regarding number of non relatives living together 
• Market for rent per bedroom vs market for rent to family

I agree the demand of the college is nice but keep in mind your average turnover will be higher with students. This will either translate to more work for you or more money paid to a PM. What other questions do you have?

Michelle Nelson · Answer

Thanks BrianC great points!

Brian C. · Answer

Hi @Michelle Nelson

I have no experience in rental properties but I just wanted to offer some thoughts. Student housing will always have some type of demand depending on the college. With that, students might not always treat your property the same way as a family would, kind of taking a big risk there. Also, have to make sure student housing costs during the semester are sufficient to cover the slower season of the summer session. Just my 2c.