North Conway, NH · Member since 2018 · 25 posts · 11 votes
It is a great time to invest in Multi Family Housing..... Prices are strong, but the rental market and high demand for rentals has spiked prices in the New Hampshire, Southern Maine ( especially on the Seacoast) and Massachusetts Areas Cap Rates of 8 - 10% are realistic with COC returns in the range of 15% have sparked major interest among Multi Family Investors
Real Estate Investor · Hamden County, MA · Member since 2017 · 75 posts · 31 votes
8y
@Account Closed
Add in the fact that the modern day generation of millennials have shifted from the stereotypical perspective of buying a home with a 30 yr mortgage and living there permanently. Research suggest that more and more younger people do not want to be "trapped" or "stuck" in one location. That being said, apartments and renting offer an appropriate solution. Any reputable and profitable multi-family market soon becomes saturated with not only local investors but out of state investors. Inventory takes an abrupt hit; dries up, and prices skyrocket.
Another ingredient to add to the mix: College Students. The cost of living on campus isn't getting cheaper. Apartments and renting soon become an attractive alternative. Why pay 10-12K a year to dorm on campus when you can split a decent 2-bedroom apartment with a friend for 1000/month. Your annual housing cost is cut in half.
To summarize; the time is NOW. Anyone thinking about getting started? I would strongly recommend to dive in. The principal behind Multi-Family investing is growing stronger and stronger every year. I'm sure fellow BP members can agree that having tenants pay your mortgage, generating passive income, tax benefits, and the opportunity to build wealth are major luxuries behind this remarkable investing strategy.
Anyone else willing to provide their insight on the matter?
Investor · Basking Ridge, NJ · Member since 2016 · 71 posts · 33 votes
8y
@Ryan Jopson I think you hit the nail on the head, College Students are the best to rent multi families too in my opinion. I have a few properties in the Rutgers area and they are cash cows. Like you said since they are living together and splitting the costs you can charge slightly higher than market rents since the per person cost is low and still cheaper than a dorm. Better yet the prices on these homes keep climbing as other investors realize the value in College Markets.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
8y
Originally posted by @Account Closed:
Typically in my market it is 600 dollars per bed room per month
Always have the parents sign this lease
You control the tenants rowdiness much better that way as usually the parents are paying for Jr to live off campus
It's our experience that you will be better served having the parents be guarantors rather than signatories to the lease. As a signatory (colloquially: co-signor) a parent is a tenant, with all the attributable rights: access, requests for repairs/enhancement/etc; the right to pick-up the phone and consume your time. As a guarantor, the parent has the right to know if little Johnny or Janey are meeting their {financial} obligations and the privilege of opening their wallet if they fail.
Nothing like a {student tenant} stumbling our of bed on a Saturday morning and encountering helicopter mom in the kitchen to disrupt social cohesion between house/flat-mates.
Napa, CA · Member since 2017 · 57 posts · 27 votes
8y
@Roy N., @Joseph DiNardi-Mack, @Ryan Jopson - I'm interested in student rentals myself. What is the time line for lining up tenants? It seems that if you didn't have your rooms filled by say Sept 1, it might be hard to fill them after that point once the quarter/semester has started?
Also, what are good cities for student housing? I'm interested in the Huntsville, AL market, but it is mostly a SFR market, so I thought I'd create my own 4-plex if you will, by renting a 4 br SFH to students, only to find out via BP that most students don't rent that way there because the campus supplies a high amount of student housing compared to many universities.
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
8y
@Account Closed Student rentals are a very time sensitive niche. I'd liken it to almost a vacation rental market. The time of the marketing AND the time of the lease start date are both crucial. In my market we advertise and pre-lease in Jan-April for June-August start dates. Every market is unique, however.
Investor · Basking Ridge, NJ · Member since 2016 · 71 posts · 33 votes
8y
Hi @Account Closed mentioned, have a lease signed in Jan-April for a June-August start date.
I can't speak for Huntsville AL, but at Rutgers pretty much every off campus house is a SFH with many many bedrooms. Everything is local though, at Rutgers there is not much student housing outside of dorms, making any off campus house very attractive. I would look for campuses where off campus SFH or small multi family housing is the standard. In my experience it makes for great returns.
Last piece of advice I have is when you are figuring out what rent to charge do so by determining how many students can fit in the house, keep in mind some rooms may be big enough to be considered a "double", and then determine what the average rent each student is willing to pay. Then multiply that number by how many students can fit in a house. For instance at Rutgers a 4 bedroom SFH may be able to house 6 students because two rooms can be considered a "double" (can fit two people). Then I know at Rutgers the average going rate for a single is $700 and a double is $550 so I would advertise rent as $3,600 for the house and be able to fill it quickly if it is even in decent shape.
Hope this helps, if you'd like to talk more feel free to dm me.