I'm thinking about trying something new: student rental.

My thoughts are to get a 3-5 bedroom home that either has or can easily be remodeled to have at least 2 bathrooms. Rent by the room. Tenants split the utility bills, internet, but I'll provide trash and lawn care since that seems to be "beneath" many college students. All tenants sign jointly and severally liable with parents on the hook as co-signers. Students can "swap out" at semester assuming all remaining students (and I) approve. A semester as I define it would run Jan - June (Spring) and July - Dec (Fall).

The one thought I'm struggling with a little....how to do "by the room" rents with tenants jointly and severally liable.

If it goes south, I can always AirBnB it. It's close to downtown where there are amenities, attractions, conference venues. My town hasn't cracked down too hard on that...yet. ;-)

Thoughts, advice from those who have done it or are currently doing it?

I don't do by the room. I do by the house, but accept roommate payments, even on Clearnow. If one doesnt pay, the others are reminded they are on the hook.

Biggest problem is parking. They all seem to have cars.

Sid,

When I lived in Fort Worth, and was thinking we were going to put down roots there, I wanted to get into student rentals. However, I also saw there were ordinances in place that limited the number of unrelated people who could share a house. (Three.) Since I left, they may have changed it to allow up to five.

So the first thing I would look at is-- does my municipality prevent me from doing what I want to do, the way I plan on doing?

And the second thing I would look at is-- parking?

Sid,

Roy took the words out of my mouth.

Why do you want to try unstable, entitled, arrogant, disrespectful, demanding, noisy, dirty with poor housekeeping habits, no manner tenants?

This is what you'll get with students. Go B&B instead (which is more supervision/managing, but different kind of customers).

I'm kind of with Roy. To me, things like student housing, section 8, rooming houses, and air Bnb just seem so much more management intensive. I'm looking for less work, not more.

Sid,

I’m planning to build a 6 bedroom 6.5 bath home. It is 3 blocks from the U. Each bedroom will have its own bathroom inside the bedroom. Each bedroom will be able to control temperature individually with baseline temp for the home. Furnished with double beds, dresser, desk, 3 -4 Cu Ft refrigerator in each room, the kind with a small refrigerator and separate small freezer. Each bedroom will have a slab door with a deadbolt. A large kitchen, large living room with big TV. Half bath off the living room. Planning to hire a cleaner to come in 3 days a week to clean the public areas, offer to have them in private rooms for added cost.

I plan to include all utilities, including high speed internet. I’ll rent it by the room, per semester.

The location is actually right across the street from one sorority, and within shouting distance of another. It will allow those ladies to live close to their sisters, yet have their own room (the sororities are usually 4 to a bedroom).

I plan to install two washers and 4 dryers that are commercial quality, pay per use. If we can design it correctly, parking will include a basement garage for an additional charge.

I currently look for students who have a minimum GPA of 2.75. It means they aren’t going anywhere. Making progress toward their degree. Also ask for a copy of their student financial award letter. If they are Pell Elighble, parents unlikely to be able to assist with rent. But, they likely have sufficient SFA to pay their bills.

Rent is due in June for June, July and August (I take payments for June, July and August). In August, when SFA disbursements come in, they pay Sept through January if staying for spring term. In January when SFA disbursements come in, pay Feb through May.

If very little SFA, then they pay monthly when mom and dad give thei student their allowance. Zelle and Clearnow are perfect for these students. For some of these, parents are paying me directly using Zelle. Student signs the lease, but if the parents want to pay directly, who am I to turn it down?

Student rentals can fetch $500 / room.

Our town is trying to crush air bnbs... they're in bed w the hotels.

Barb[MO]

Are you worried about zoning?

"Double beds" - you mean two twin beds? OR one full bed?

(Technical terms: twin bed is 3' wide...full bed is 4' wide).

It’s a good market. They are not all disrespectful little monsters. Most are just fine, but they don’t have a lot of life skills. They don’t call for stupid things because they are stupid....they really don’t know what to do. We have tried “ by the room” with utilities included. That ended when I saw the front door remain open for about 20 minutes on a below zero day. I chose to rent the entire house instead of by the room. Here is why:

1. I don’t know that jointly and severably by the room will work. If you are renting a 4 BR house for $2000 then they are all on the hook for $2000. If their lease is only for a $500.00 room then I don’t know that you can make them responsible for everyone else’s room too.

2. This way it is a SF home. Different rules. Pest control can be on their dime not mine.

3. What if you have just one that is a problem? If you get rid of just that one you have a vacancy in one room. That is hard to fill during the school year. If they are all on one lease, they all have skin in the game. They will straighten out that problem all by themselves or replace that tenant with someone who won’t be a problem .

4. If they cause problems I can evict as a group. 1 eviction, not 3-5 ( or however many rooms). Just one all done at once with everybody gone will make it quicker to get it ready to rent to somebody else if it doesn’t work out. If you decide you don’t want college anymore you won’t be able to rent it to a family if there are any roomers left in there.

Fred, my zoning is fine. It is R3, so up to 8 bedroom. I can build up to 4 story if I want to, but I don’t really want to go that high. I could legally have 16 people if 8 bedrooms. In that case I would just rent the entire place to a fraternity.

I mean full sized beds. If I can get full extra long, even better. If I rented to a fraternity they would need twin extra long and no refrigerators in the rooms.

My biggest challenge will be parking. If I build 6 bedroom, I need parking for at least 4 cars under city rules, but I really need one per bedroom. So 8 bedrooms would be 6 parking spaces minimum, 8 or even 10 preferred. And, I can only cover 40% of the lot with building/concrete/non-permeable surface.

It’s a good market. They are not all disrespectful little monsters. Most are just fine, but they don’t have a lot of life skills. They don’t call for stupid things because they are stupid....they really don’t know what to do. We have tried “ by the room” with utilities included. That ended when I saw the front door remain open for about 20 minutes on a below zero day. I chose to rent the entire house instead of by the room. Here is why:

1. I don’t know that jointly and severably by the room will work. If you are renting a 4 BR house for $2000 then they are all on the hook for $2000. If their lease is only for a $500.00 room then I don’t know that you can make them responsible for everyone else’s room too.

2. This way it is a SF home. Different rules. Pest control can be on their dime not mine.

3. What if you have just one that is a problem? If you get rid of just that one you have a vacancy in one room. That is hard to fill during the school year. If they are all on one lease, they all have skin in the game. They will straighten out that problem all by themselves or replace that tenant with someone who won’t be a problem .

4. If they cause problems I can evict as a group. 1 eviction, not 3-5 ( or however many rooms). Just one all done at once with everybody gone will make it quicker to get it ready to rent to somebody else if it doesn’t work out. If you decide you don’t want college anymore you won’t be able to rent it to a family if there are any roomers left in there.

Been doing this for 15 years.

Our market has changed dramatically in those 15 years.

Bear in mind I live in western KS & campus is populated by Wranglers, Carhartts, trucks & livestock trailers. We get our share of "metro" kids as well but I'll take the farm/ranch kids every day, all day long. They are much more respectful, responsible, knowledgeable & have some common sense.

Just advertise your property to the college population. Make them come up with the roommates. And the swapping out if necessary. All I do is show the unit, collect the applications, sign the lease, move them in, collect all funds & move them out. I'm not their referee, babysitter or mama & I certainly don't play matchmaker when someone decides to move out.

That being said.......I absolutely abhor our 4 & 5 bedroom houses. Our market is $300/bedroom. I do not pay utilities on SFH. Ever. But that's not the trend in town because PMs make more commission by jacking the rent & renting utilities & internet paid. Unless it's a shared meter I don't do my investors that way. Everybody's responsible for their own utilities. Lots of kids don't like that. Large houses didn't used to be hard to rent. Now not so much. The demographic for our large houses are groups coming right out of the dorms. And they stay a year & move on. Big houses turn over every year. And big houses are usually big turn overs.

Our university has focused on their virtual campus for the last 10 years. It has been a priority. Enrollment continues to grow but many kids never hit campus. They are now offering degrees where kids never step foot on campus. While this has been fantastic for the university not so much for local LLs. Our school is a small 4 year state school. We're cheaper than KU & KState but our demographic is still western KS/eastern CO kids.

Student housing is a cash cow, isnt it? I see what my friends kids pay for off campus housing and it’s a dump and they pay a ton to live there (x however many kids are there). I think it’s probably like recovery houses - lots of management stress to start out but once you are established with systems in place, great cashfow.

I absolutely love my 1 bedroom places that I rent to students. My students love them because they don’t have to mess with roommates.

I bought a shack for 120, Three bedroom one and one half bath.

I made it into a five bedroom three full bath. The way I did this was to make two bedrooms in the basement. (Didn't cost me much to do this).

The first few years the place took in about 1,200 a month. After a few more years I had it up to 1,800, 2,400 and finally 3,000 a month for the five bedrooms.

I had teni coming and going every school year. Aug 1 4pm to July 30 10am for over 120 months I never missed a month.

Then things changed. Teni stopped shopping for houses as a group and began to come as individuals. Groups vanished. Now rather than showing the shack once or twice, you would need to show each room three or four times. A tremendous problem.

As a group, room selection was not up to me. With individuals the best or cheapest rooms went first leaving me the worst rooms to rent last.

Allow me to be clear. You have four people who moved in on Monday, and on Tuesday you are trying to show the room to a fifth candidate. That person feels like they are getting the worst room in a home of strangers. They often would say no. In reality they were all strangers and the rooms didn't differ too much.

Times continued to change and as cell phone plans got better, so did the expectations of new students. They wanted the best, the biggest, and the cheapest. This meant anything that shared a bathroom fell out of favor.

The solution is a bargain price or each room has its own bathroom. If you can lay the rooms out where they share a bathroom and are somewhat private from the other rooms, this does also help.

(i.e. Cape Cod that has bath and rooms up top, or a well done simple basement that has an apartment feel)

Post Script. I paid that mortgage off a couple months ago but my average rent is now down.

Best years were $3,000 a month

Last sixty months $2,796.92 per month

last 120 months average $2,827.08 per month.

S i d, since rent is proportional to # of rooms, I’d try to find a 6 bedroom 2/3 bath, if I could. In my market, next to cost of rent, location is most important. After that it’s safety of home/neighborhood, performance of internet (get that router in the center of the house), cost of utilities, parking, washer dryer, condition of kitchen and bathrooms, etc. And it’s my opinion, how the house looks (curb appeal and interior) is key, so find a 20 year old whose good with colors and have her be a little creative in the inside of the house.

I always just rent to groups and it’s worked out fine. I tell them if they get ¾ of their group together to sign the lease and submit security deposits, I’m fine with adding other people later.

Usually there’s a school website to advertise on. When they contact me, I tell them give me a time and day when your entire group can be there to see they house. I don’t show a 6-bedroom house to 1 or 2 individuals. When I show the place, I try to ask them some questions and see how they do with eye contact. I do check credit and I’m looking for no credit or good credit, just not the ones who get three credit cards and max them out.

I love student rentals! One final thought is: the closer to the school, the higher the rents, but also the more trouble the tenants are (my opinion, of course). Good luck!

For what it's worth, I lived in dorms all four years of undergrad.

In the dorms I lived in for my 2nd/3rd/4th years, we were set up so that 2 bedrooms (4 people) shared one bathroom. However, for my freshman year dorm, there was a communal room for showers and toilets. However, each dorm room had its own sink, so you could at least brush your teeth/wash your hands/wash your face in the morning (or whenever you wanted) without leaving your room or jockeying for space in the communal bathrooms.