One of the most unique niches in real estate investing is college housing. Many investors are far too nervous to invest in college housing for fear that they will deal with nonstop turnover and operating costs. Others feel nervous leasing to such young renters for fear that they will have their properties constantly damaged and have to pursue evictions. However, investing in college housing in a market like Sacramento is far from what many people may think it would be like. If you have ever wondered whether college housing is a good fit for your portfolio you can’t afford to miss this post!
What Are Your Goals For Real Estate Investing?
Just like with any type of new investment, you need to consider what role it will play in your overall portfolio and financial future. At this point, what are your short and long-term goals for your investments? Are you tight on cash flow or more concerned with generating long-term wealth through appreciation? Are you generally comfortable only working with a single-family and smaller multi-family properties or are apartment complexes your bread and butter? Have you ever had experience renting to low-income tenants? All of these factors should play a role in your decision to rent to a demographic that is not only young but frequently financially unstable. While there can be a fortune to be made in college housing, that fortune can only be made when you have the experience and knowledge necessary to manage the property properly.
The Pros Of Investing In College Housing
The first and most obvious benefit is that there will always be a strong and steady stream of tenants for you to pick from. The next is that while other types of housing throughout the Sacramento metro area may fluctuate a great deal, college housing has the tendency to remain far more stable. Having that kind of stability is a dream come true to many landlords that are needing a more predictable asset for their portfolio. Thirdly, it can also be fairly easy to market student housing because you already know some key areas to place your marketing, such as the school website.
The Cons Of Investing In College Housing
On the flip side, we are talking about renting to college kids who are out living on their own for the very first time in their lives. This means that you need to accept the fact that there will be parties. There will be roommates. There will be tenants who get into fights with roommates and want to make lease changes. Furthermore, you can pretty much bet on the fact that the majority of these kids will not look out for the apartments in the same way most adults would because they don’t care about things like changing the batteries in the smoke detector. Therefore, you need to be very prepared to make regular repairs and renovations; many of which probably could have been avoided.
Are You Cut Out For Owning College Housing?
There is no denying that owning college housing can be very lucrative. However, it does require you to have enough operating capital to handle regular repairs and the patience for those regular repairs as well. Unless you already have experience in renting large multi-family units or with this particular population, you would be wise to enlist the help of a professional property manager to take over the frequent and often ridiculous issues that arise on a daily basis with college housing.
For more information about how Alpha Property Management can help you become the next proud owner and landlord of Sacramento college housing, give us a call today.