Hello! My name is Jake and I'm an aspiring real estate investor. I just created my BiggerPockets account, so I'm looking forward to meeting and interacting with you all! I just finished my first semester at a university in a small town in upstate New York. For a little while now, I've had the idea of beginning my investment journey with SFRs in my town.
The general outline of my plan is to purchase a property by the summertime, and house-hack it the following school year. The goal would be to purchase one property each year, living in the most recently purchased and renting out all of the leftover units in all the properties to students at the university. Thus, by the end of my senior year, I would have 3 properties fully available to rent, if all goes to plan. Of course, depending on what deals become available, I would definitely consider doing multifamily, but I'd prefer to start with single family unless something jumps out at me.
I've thought about this a lot, and here's a list of the advantages/disadvantages that I've assembled:
Pros:
- Higher demand during the school year, meaning likely far more consistent vacancy rates (the main reason I thought about this idea at all - I like consistency)
- If it's a fixer-upper, I'll have the entire summer to work on it as my parents live close to the university, and any remaining work I can do in my free time during the year since I'll be living there (Just a general advantage of house-hacking)
- Allows me to get my feet wet with investing while still pursuing my degree
Cons:
- Depending on the area, much higher vacancies than other properties (assuming, of course, the months of June, July, Aug, and Dec will be vacant, so a vacancy rate of 33%)
- Since it's a small town, there isn't a large supply of homes within walking distance of the university (currently 2 on-market being sold) - although last year's foreclosure auction suggests that that may be an abundant avenue to locate deals
- This town is notoriously a party town, so rental properties here may be more prone to getting trashed, although this doesn't seem to be an issue in any of the properties currently being rented that I know of, even in the bigger houses that host parties nearly every weekend
I could also consider purchasing properties within ~5 miles of campus, so not walkable, but more than reasonable driving distance, although they will rent for less. But, for example, last year's auction housed a 10-unit property only 3 miles from campus. From the exterior it appeared to need a lot of work, but it was purchased for only $60,000, so depending on the condition of the interior, that could become a great deal. Being that it lies on one of the routes my cross country/track team runs regularly, I will definitely be keeping an eye on the status of that property as a good example of an investment outside of town.
I've also thought a little bit about how I could utilize a 1031 exchange to help me out here, but I'm not super educated on that at the moment (I'm currently in the middle of Turner's rental property investing book, so I should be soon!), so if anyone has any thoughts on that I would love to hear them. I know I didn't really ask anything specific here, but I'm mainly looking to generate a discussion on the topic of investing in college towns, so if anyone has any experience with that, definitely leave a comment, as well as if you have any suggestions for my specific situation. Thank you all!
