Are you completely new to real estate investing or are you just getting your feet wet? I am a real estate agent, my friends and I watch HGTV. Let me tell you, there are so many ways to invest in real estate. I think a lot of potential real estate investors watch house flipping shows and misjudge the process. It’s more work than most investors want. Doing your own repairs can save you money, but many investors are not general contractors.
In conversation, friends and clients interested in real estate investing often ask me where to start. I ask them if they have thought of university housing for rental income.
Some who would not have the necessary funds for the renovations. It can be a problem, but it is not a problem that the average person cannot overcome. FHA loans have guidelines and restrictions on lending to investors. You can have two non-investor residential loans in Ohio. Properties must be at least 50 miles apart. There are FHA loans for investors and a slightly higher interest rate. FHA 203k loans are for distressed properties and include up to $ 35,000 for repairs.
The great thing about FHA loans, they only require a 3.5% down payment. You should know that loans with less than 20% down payment require PMI or private mortgage insurance. This is a burden on premium lenders and a federal regulation that protects lenders in the event of borrower default.
Investors should understand that when you finance, you are not allowed to do the repairs yourself. It is prohibited and federal law. This protects the markets from decline, as many buyers fail to make necessary repairs, which lowers property values. It also protects lenders. If a borrower defaults, the lender would rather have a property finished and updated rather than a distressed eye on their books.
Now you know more about financing college real estate investments. Now let me tell you why college housing is hot for real estate investors. The rent will always go up. Getting a university education is expensive, not all students want to live in a fraternity. Following current rental rates, but renting rooms for a price equal to or a little lower than the going price, will ensure a good occupancy rate.
In Cincinnati, there are many universities and college campuses. An investor would have no problem finding potential Cincinnati Properties for University Housing.
Many students find their way to college, taking jobs near their education center. Some students really want to save on gas and car insurance. It is very interesting for them to find affordable housing close to school and work. Even better if they can walk, cycle or take the bus to their destination.
Advertising your university accommodation is easy and even free. Simply advertise your rental properties to schools. Talk to key figures like the leader of the debate team, the quarterback, or the college newsletter or blog.
I like helping new real estate investors, I have no problem with small private investors acquiring properties to use as university accommodation for rental income. What I don’t like are the big real estate investment firms that are bursting with capital, buying all the properties they can at a discount, and charging students a premium.
There is an interesting brewing debate about this. I came across an article “The Dorm Debate” on the New Jersey Monmouth University online journal “The Outlook”. In this article, the students raise the question; should universities provide affordable college housing?