It can be a very profitable business to be in.
How good of a go you make of it will be based on:
Initially purchasing a quality product -
Location - A fast WALK to the universities -
Setup - Adequate square footage, reasonable non rat-in-a-maze design, and lower bedroom count per washroom / kitchen matter
Features - Adequate fridge/freezer space, dishwasher, laundry, AC, etc.. and
Condition of property - Whole free walls, lighting, clean units, common area`s, exteriors -
Both features and conditions with sufficient cash can be modified after purchase - The key is to budget upgrades in prior to purchase and ensure a spread in purchase price to allow for value to be added through change.
Continually re-investment in maintenance - not try to juice every cent of profit out of the property - will go a long way to have a sustainable revenue stream year after year.
Pro-active management - Maintenance inspections, presentation quality, renting your units many months in advance, treating your students tenants with respect and providing fast response times to their concern, etc.. can often make the difference between having a property that risks vacancy and rents at $450 / bed and one that is always filled 6 months in advance at $500+/bed.
There are disadvantages too:
Minimal supply - You need to be patience when purchasing and be in a position to take immediate action when the right opportunity presents itself Financing - Higher cash needed on initial purchase and potential for less flexibility in future for re-financing if that is a consideration -
Higher operating costs - Insurance, Cleaning, Repairs, etc... can all be higher than non student rentals.
A prudent investor will purchase a property where the higher rent will more than cover these additional costs.
QUOTE (afshinrein @ Nov 18 2010, 09:55 PM) Hello,
Does anyone have any experience with student housing. I am thinking of getting one in Waterloo/Ontario and assign a prop. Management to it. Beside to management part of it, what anyone thinks about its potential for positive cash flow, is it a good project?
Thx