College Rentals, Missouri

[Levi Mitchell]

We are a young couple looking to begin building our portfolio with student rentals in great markets in Missouri. We believe in our model, so I’m not necessarily interested in student rental horror stories, but would love some insight on what areas might fit the criteria of a solid college rental area! We have had family in all corners of the state at universities, but would like to know what Missouri investors have to say about the local markets! Thanks!

[Bradley Niemiec]

I have a small student rental portfolio in PA. When you invest in off campus housing it’s all about the number of beds as opposed to the number of doors.

Some things to consider when you evaluate an area to invest in student rentals:

1. Know the area that undergrads rent.  There is usually a maximum square block area surrounding the university that is the highest density of undergrad off campus housing.  Purchasing outside of that area will make your property less desirable and potentially unrentable to students. 

2. Familiarize yourself with specific university rules governing off campus housing eligibility.  Some allow all; some have lotto systems or point systems; some allow only seniors.  Some universities have specific code requirements for off campus houses that may go above and beyond local government requirements.  Knowing these things will help prevent unwelcome surprises after purchase.

3. Research what the boarding costs are for the university on campus traditional housing.  That way you know what the parents are already prepared to pay. This can help you establish or negotiate a rent price.  This also effects payment frequency.  If they’re paying the university their boarding “rent” by semester then there’s no reason you should be collecting monthly.  For example, My student lease term runs 6/25/20-5/25/21 (this allows for a one month landlord possession to repair and upkeep) and they pay the total term rent in two installments due 5/15 and 11/15.  Obviously my students are only ever a single year because the university area I service only allows seniors to live off campus. 

4. If you have any connection to Greek life don’t be afraid to reach out and see what off campus areas they like to “control”.  Greek and sports clubs like to carry tradition and keep the same houses year after year.  These houses seem to take a little more abuse but tend to also rent years in advance.

Also, tailor your lease to include additional rules and regulations pertaining to student housing.  For example, limiting the number of people inside the property at one given time.  Older houses have a hard time with 200 revelers bouncing up and down at a 2am party.  If that floor collapses you want to be covered.  Require renters insurance with liability.  Get the maximum state allowed security deposit.

Good luck!