Pros and con of owning student housing

Hi, I'm considering investing in student housing. Can anyone point me to good resources to learn more about this segment of multi-family properties? Does anyone have any advice? Thanks, Kim

Hi,

1) Small town vs City and 2) Quaint Old Home vs.Modern Apt. Building are just two questions that will greatly influence my response to this question.

Smaller town, about 30,000, and probably an older home. One that is existing as student housing.

Hi,
Proximity to campus is your biggest advantage if you have it. A really important thing to remember is that a lot of students have Never had an apartment. It is their first opportunity at independence. They have lived with parents/guardians and most likely been on campus which is like being babysat perhaps more than they were at home. The idea of the freedom they will experience in their first apartment is intoxicating in a few ways. They get excited about having a mailbox! This is why you need to realize that there is a need to take them by the hand and walk them through the responsibilities involved. Spell it out for them in the lease or on a separate piece of paper. Things like: "you cannot put anything down drains like grease or non-soluble paper products that will cause clogs. In the event of a clog your deposit will be deducted if it is determined to be the fault of the tenant." Give them a punch list of responsibilities they will have for the first time to get them thinking and doing the things that are necessary to maintain a living space. Tell them how much they save by keeping the thermostat lower when they're gone and what to do if they smell gas, that they have to contact you if there is a maintenance concern!
If you can do these things while keeping the experience fun and enjoyable you will develop a revolving door of good occupants who are from one of the most financially stable groups you can find.

Kim Manion wrote:

Hi, I'm considering investing in student housing. Can anyone point me to good resources to learn more about this segment of multi-family properties? Does anyone have any advice? Thanks, Kim

Student housing is definitely a specialty business. If you are already an experienced landlord, that is an advantage, but it is no guarantee that you will be successful because there are specific risks involved in managing this type of property.

There are many drawbacks to student housing, including increased risk of physical damage to the property, increased general liability risks, and increased maintenance/cleanup due to the fact that students generally come and go every 9 months and leave the house in worse condition than when they arrived.

Insurance is far more difficult to obtain for properties rented to students, and is considerably more expensive for all of the reasons noted above. In fact, the vast majority of carriers will decline any submission that has even one student occupancy!

That being said, there are some potential positives, including the opportunity to charge rent that is above market rates. This will depend somewhat on the location, but in college towns such as Amherst, MA, for example, there is a very small amount of rental property compared to the demand for student housing.

The most successful student properties I've seen were professionally managed by on-site staff, and were owned by people who had quite a long history of handling this type of property. Good luck if you get into that type of property! :unsure: