All Forum Posts by: Steve Sellers

A few points (based on data) to keep in mind here amid the doom and fear. 

https://siepr.stanford.edu/research/publications/how-working-home-works-out?fbclid=IwAR3JHNVOvIvfeDiM7t58MIYwZhdqvt-_JYby10OpfI0mZjrYiWAq6MT2tTI

* 70% of jobs can have an element of WFH.

* High income quartiles are almost all WFH. 

* 60% of college educated adults can WFH. 

The facts don't lie. People in a position to buy a house are the people best positioned to have a WFH compatible job, thus stable income and less uncertainty. Combined with record low rates, this groups buying power has never been greater. It wouldn't be a surprise that in nice neighborhoods almost every household would have a stable paycheck enabled by WFH. 

Try to understand the situation before spouting fear, uncertainty and doubt. 

Harvard announced full remote for 20-21 academic year. Expect all the other major schools to fall in line shortly. 

Should make for interesting opportunities in college towns. 

https://www.fas.harvard.edu/fas-decision-2020-2021-academic-year 

@Gregory Schwartz

Like you say, CS reaction will hinge on regional management & regional politics. But normal is out of the question. At a minimum there will be signs, precautions, warnings, distance. At a maximum the university will be full remote and the college rental market recked. Don't lose your shirt. 

Scott Galloway puts it better than I could:https://www.profgalloway.com/higher-ed-enough-already?utm_source=newsletter&utm_medium=email&utm_campaign=NMNM20200626

"What parent would let their kid go to a movie theater 15 times a week? That’s what some universities are proposing with in-person classes."

"Every university catalog brags that their student body represents all 50 states and 20/30/40+ countries. This means every large university will be welcoming thousands of people from regions that have some of the greatest infection rates globally."

Interesting story from NY Times today on the prospect of COVID having lasting impacts on college towns. 

https://www.nytimes.com/2020/06/28/us/coronavirus-college-towns.html?action=click&module=Spotlight&pgtype=Homepage

College Station, Population ~120k with TAMU total enrollment ~70k (60% population is associated with the University). So I think it is fair to say College Station is a "college town" in the strict definition of the word. Of course the COVID long term response is playing out to be pretty regional specific.

Couple excerpts from NYT article

"[UC-Davis] Fall classes will be mostly remote, the university announced last week, with “reduced density” in dorms." (perhaps lower density housing has a leg up in the new normal)

"on campuses across the country, attempts to bring back football teams for preseason practice have resulted in outbreaks." (don't expect a strong football program to carry the town) 

"Local economies depend on their numbers and dollars, from sales taxes to football weekends to federal funds determined by the U.S. census." (lower census numbers from closed campus will be reflected in higher taxes)

I wanted to start a discussion about strategies renting by the room to college student near the many 4-year universities in DFW area. Has anyone got experience in this area?

I have an acquaintance doing well renting large SFHs (5ba / 4ba size) to college students outside UT Dallas (+40% rent premium over renting to families), with some caveats. 

• He furnishes common areas - couch, TV, refrigerator.
• City-by-city rules about maximum unrelated adults in a household.
• Finding property management is difficult (more maintenance than a family, but less than an AirBnB).
• Utilities are in owners name, with fixed cost per student per month added to rent.

Has anyone had success with this approach? Locations to look at or avoid? COVID risks due to college campuses closing?

@Tom Phelan

Can you describe your software approach to zero in on this criteria? 

I use hipcamp on a yearly basis (west coast california). 

You have some decent points: AirBNB could eventually eat their lunch. However, in places near major metros, ESPECIALLY California, every single established state/federal campsite is going to be booked out for months. Year round. I can't speak for RV because I've never used one. 

Hipcamp is great because you get that special owner-operated flavor even if its just a primitive campsite with an outhouse 100 feet away. Not to mention Hipcamp generally gets less traffic than established campsite booking methods, and with *gasp* 2 weeks planning ahead I can actually find something. Successful locations that I return to generally have other interesting things: located on a small farm, have a creek or pond, near a beach, trails for walking/mountain biking. 

Take a look at demographic trends. Millennials love to camp. Look at the success REI (the co-op) is having.

If you have a busted shanty, some flat clear spaces and a fire pit which couldn't make it on AirBNB, list it on Hipcamp. You can call it glamping. Especially if you're near often sold out destinations or major metro areas. 

This is a great and methodical approach to market selection, thanks for laying it all out. You're right, it IS inviting competition :P, I joke, I joke.

Might I also suggest Logan UT which is about an hour north of Ogden. Smaller town, but similar growth trajectory and strong fundamentals. 

Corey, 

Horizon Rd & W Ralph Hall Pkwy is a decent spot. I've seen a few properties pop up there in the last year. Stay away from any screaming deals near Rockwall lake, that area is actually a flood plane and got flooded a few years ago. Check the FEMA maps first and foremost. Lots of houses have flood designation amendments if they are up against little creeks, so they wouldn't disclose any issues because they had their boundary inspected and ruled OK. Something to keep in mind.

Your biggest variable is going to be prop tax, and it changes from street to street. 

A couple expense assumptions:

Insurance: .6% of market value per year ($1300 to $1700 for garden variety SFH)

Repair buffer: $50/mo

PM: 8% of gross rent + 80% of first months rent 

HOA: Ranges from $0 to $50/mo. Older hoods built prior to about ~2000 usually have no HOA in DFW. Almost certain a new subdivision will have HOA.

Vacancy: 3 weeks every 2 years + utilities 

Make ready expenses: from $1000 to $5000 depending on house needs 

I own several houses in Rockwall county. 

The big distinguishing factor between Rockwall proper and Royse City is school district. RISD will command a 10-15% MV premium over RCISD, and correspondingly more rental demand. I really am a fan of RISD because it is high quality across DFW in general even relative to the big names in Collin county. Nothing against Royse City, its a matter of strategy, but personally I er on the side of better schools. 

A decent home away from the water in Rockwall should cashflow (unlike Plano and Frisco), look off John King blvd, or parts of Fate. You can get a 3/2 on the MLS that can fetch .8% of MV per month, should net $100-300/mo depending on PM situation. If you can secure a decent discount then you could hit .9-1%. Prop tax ranges from 2.5% in fate to 2.16% in Rockwall city. 2.16% is some of the lowest you'll find in DFW.