Multi-family investing is a vast market. There are a lot of pros and cons and a lot of options. You can invest in many different classes of real estate and your level of commitment can vary based on how much you want to invest financially as well as the amount of time you want to invest. If you live in or near a college town, you may be wondering if it is smart to invest in a multi-family property near campus. There are a lot of factors, both positive and negative to consider.
Pros
Consistency
If you are renting to college students, you can be pretty certain that you are going to have consistent revenues. Because while this may be their first time living away from home, most students are either getting scholarships that help pay for the room and board portion of their education or they have parents who are lending a hand. College students also almost always live together. And while it may feel like a huge hassle to have multiple payments from one apartment, if one renter is late on rent, at least you have part of the rent from the other tenants.
Demand
Demand for housing in a college town is always at an all time high. Campus housing is always limited and no matter what, there will always be a need for housing within walking distance of campus for upper class-men and other students to live. You will normally see a dip in rentals over the summer, but during the school year, you can be assured that your units will be full.
Expectations
One of the great things about owning an apartments building that caters to students is that they aren’t always looking for the latest, greatest amenities and features. They are almost always willing to settle for less in exchange for cheaper rents. And this is good news for you if you are looking at properties that don’t always have the bells and whistles already built in. You can either leave the property as is, or you can slowly add amenities as you are able.
Cons
Property Damage
Of course, dealing with first time renters brings some risk. They aren’t quite used to the responsibility of having to maintain a home and sometimes that comes at a cost to you. However, it isn’t a complete loss. Requiring a deposit, renters insurance, or even a parental contact could help keep some of the maintenance issues at bay and could protect you in case of major damage.
Reliability
You may worry about student renters being reliable. And this is a valid concern. Will they pay rent on time? Will they try to get out of their lease if they leave school? Will they take responsibility? These are all great questions and good things to consider when renting to a younger demographic. And the answer is that, you’ll never know until you try it. But the good news is that there are dozens of companies in every college town who do nothing but property management for students. They are well versed in the patterns and ways of college students and they can help keep things under control.
Investing always comes with risk. And when you are dealing with a younger renter base, there are plenty of additional variables. The bottom line is, do your research, invest wisely, and realize that every investment comes with a lot of risk. No matter what.
