5 Things You Should Know about Investing in College Rental Properties
As a personal owner of multiple rental properties, I have learned through experience, research, and old-fashioned trial and error, how to successfully invest in college rental properties. Investing in rental property in a college town provides the gift that keeps on giving. The flow of students, faculty, and staff creates a constant demand for housing. Thanks to this high demand, the risk of vacancy is seriously decreased for property owners. While the countless benefits of owning investment properties are no longer a secret, I’d like to share with you some insider information that may not be as widely known.
1. Other than financing, the most important thing to consider is geography!
Research the community and find locations that are convenient for students. The best way to avoid vacancy is to have a highly desirable location. The closer you are to campus, the better. If you are not within walking or biking distance to campus, make sure that your property is close to the bus route. The #1 question I receive from prospective tenants is….is it on the shuttle bus route?
2. Understand All of the Expenses Involved with Your Property
Maintenance, taxes and insurance are all important expenses to consider. Be familiar with your local tax rate, as that will be your single largest expense. It is usually expected with college rental properties, to include basic appliances such as a washer, dryer and refrigerator. These appliances usually last 7-10 years. For houses and duplexes, mowing, irrigation and landscape maintenance are seasonal expenses.
3. Know how much time you have to devote to property management.
If you are a local resident with a flexible work schedule and you have been a homeowner in the past, self-management may be the right choice for you. Many of your tenant’s needs may be unpredictable. So if you are planning on self-management, it is crucial to be available. I have personally found that managing my own rental properties yields the best results. However, if you live out of the area, there are typically several qualified property management firms in every college town.
4. Create and maintain curb appeal.
The single most important moment in selling or leasing of real estate, is the moment that your potential client or tenant drives up to the property for the first time. During that brief time, opinions are quickly formed about the property in general, as well as you the property owner. If your property is a house or duplex, create and maintain quality curb appeal. This can be done on a relatively low budget with scheduled lawn care, landscape maintenance, and making sure the yard is neat and free of debris. A fresh coat of paint goes a long way too. These basic things give the prospective client the feeling that you have pride in ownership, which makes leasing the property much, much easier.
5. Be the landlord you would want your children to have.
Once you have decided to purchase an investment property in a college town, it is essential to take excellent care of your tenants. Many of your tenants will be new to living on their own and far away from home. Being available and responsive will help them feel comfortable and will make them more likely to recommend you as a landlord. I have a daughter who is in college, so I try to make my decisions as a landlord with my tenant’s best interest in mind. I have owned rental property in our college town for the last 16 years. In all of this time, I have never needed to advertise my properties on-line, or on site with a “For Rent” sign. Word of mouth from my tenants to their friends, has kept my properties 100% occupied for the last 15+ years.
