Thinking of buying a student rental property

[scesnick]

Wifey and I have an opportunity to buy two student rental properties ( houses) They are already rented to students by the semester. Evidently they are owned by the bank. We have been offered an incredible deal if we buy both.
We have an appoointment to look at them next week. My question is, other than the obvious, what should I look for that could possibly cost us big money to repair? Also, isn't there an obligation by the owner or realtor to disclose any serious issues? just wondering...

 

[brin]

I have owned rental houses for over 30 yrs. now..It is not an absentee type - hands off type venture. I had a rental house in a university town rented by students and it can be a real nightmare. You have not seen a trashed house until you have seen one trashed by students who are out on their own with no supervision for the first time in their lives. All tenants whether students or not will not take care of the property like they would if they owned it and can easily do much more damage than any security deposit they may give you.

I would say...first hire a real qualified home inspector to go over both houses or use a local contractor you trust...then , if you decide to buy and rent...Always get a credit check on the students, their parents and have the parents sign the lease and include a list of rules as an amendment to the lease.

Good Luck !

 

[om21braz]

Not my experience, but that of a good friend - if you require financing it could prove difficult. He owns quite a few of student-rented homes, owns them clear. He found it all but impossible to borrow a relatively small amount of money on them for improvements, even with a spotless credit record.

 

[2458n]

If you really hate someone - give them a rental property.

 

[clemsonfor]

The more slum like the houses the safer the bet. We had what we called the forestry house where just forestry students always rented it. It was an older 50-60's house and was definitly student lived in. I think 3 lived in it. I think all the systems worked fine and did not leak or anything but had bad windows setteled badly and cracks and worn paint all over. The price the guys paid they did not care. also think the owner liked forestry students and they seemed to take decent care of it, and he fixed real problems for them as well. Just was not to big on how it looked though.

 

[scesnick]

Thanks fellas. Yeah, we are aware of the horror stories. We have been looking to get into this market for a few yrs now and this deal is just too good to pass up.

Evidently these are bank owned homes that have all seven vacancies are already rented through fall 2012. The bank wants up off the properties and they are willing to cut the price of both homes in HALF to do so.

I would love to hear more advice on how to go about renting these out and how the owners here go about protecting their investments from, well, student tearing them apart.

 

[DAY]

Good advice, get the parents to sign the lease. Go talk to other landlords in town- there may a good reason why those 2 properties are available!

And, if you do become a student landlord, try to rent to females. And check their GPA!

 

[mmurphy]

Last months rent in advance as well as a deposit. Contract with specific rules, like no pets.
You may also want to see if your city has a regulations for landlords to deal with. Some areas have a fee, inspection, and etc to deal with.
Fix everything to be solid, and skip on beautiful things! Did I mention rules?

 

[Western]

I would say...first hire a real qualified home inspector to go over both houses or use a local contractor you trust...then , if you decide to buy and rent...Always get a credit check on the students, their parents and have the parents sign the lease and include a list of rules as an amendment to the lease.

Good Luck !

Darn good advice there.

 

[om21braz]

If nothing else, be assured you'll have some interesting stories to tell after a few years of it. LOL Maybe you won't have any build a tree house (including real tree branches) inside the home so to pretend he was a "youngin" again. My friend had this happen and noted it looked surprisingly good - he wished he could have removed it without tearing it apart.