UNR Student Rental Market Questions

[Leon Huang]

Hello BiggerPockets Forum,

My business partner and I are first-time investors and would appreciate a reality check on our strategy. We are targeting SFH in a 1 -3 mile radius of UNR campus. We want between 3-5 tenants under a single lease. We are NOT pursuing rent by the door. We are working with a 20% downpayment at 4% interest for 30 yrs. We are looking at larger 3BD/2BA for opportunities to convert extra rooms/finished basements/garages into extra beds/baths.

We noticed if the rent is about 0.5% of the total property value, we will be about breakeven for pure cashflow at the following assumptions using BP's Rental Calculator (e.g., $500k property requires ~$2500 rental income to breakeven):

5% CAPEX, 5% vacancy, 5% repairs/maintenance, and 8% property management (we have something worked out with our property manager)

Here are our questions:

-Would ~$600/room be a competitive rate? (4 rooms @ $2.4k or 5 rooms @ $2.75k).

-How competitive is our strategy in today's market? We are targeting a CF of $400-600.

-What neighborhoods in the UNR area should we steer clear of? We've heard specific neighborhoods are rougher.

-Is there a market for 3-5 person tenant arrangements under a single lease besides students? In the event, it is too late to capitalize on the upcoming school semester.

We appreciate any advice or insight. Thank you.

[Leon Huang]

Hello @Jonas Buchholz

Excellent response. I appreciate your thoughtful replies. How do you mean that there are ways around ADUs? I am familiar with multi-zoned properties but other than that...

The reason we did not want to rent by room was based on our agreement with our property manager. The operational costs and logistics can be quite a headache. 

On another note, have you noticed what type of families that come to Reno and where do they want to live?