Are you completely new to or just getting your feet wet with real estate investing? I’m a Realtor, my friends and I watch HGTV. Let me tell you, there are so many ways to invest in real estate. I think many would-be real estate investors watch shows on house flipping and mistakenly gauge the process. It’s more work than most investors are up for. Doing your own repairs might save money, but many investors aren’t general contractors.
In conversation, friends and clients interested in real estate investing often ask me where to begin. I ask them if they’ve thought about college housing for rental income.
Some that would don’t have the funds needed for renovations. That can be an issue, but it’s not one that the average person can’t overcome. FHA loans have guidelines and restrictions on lending to investors. You can have two non-investor residential loans in Ohio. The 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, loans with less than 20% down payment require PMI, or Private Mortgage Insurance. This is a premium lenders charge and a Federal regulation that protects lenders in the case of borrower default.
Investors need to understand, when you are financing you aren’t allowed to make the repairs yourself. It’s prohibited and Federal Law. This protects markets from decline as many buyers don’t complete needed repairs, dragging down property values. It’s also protects the lenders. If a borrower defaults, the lender would rather have a finished, updated property than a distressed eye-sore on their books.
Now you understand more about financing college housing property investments. Now let me tell you why college housing is hot for real estate investors. Rent is always going to go up. Getting a college education is expensive, not all students want to live in a frat house. Keeping up with current rent rates, but renting rooms for at or a little less than the going rate, will ensure good occupancy.
In Cincinnati, there are numerous universities and college campuses. An investor would have no problem finding potential Cincinnati properties for college housing.
Many students work their way through college, taking jobs near their education center. Some students really want to save on gas and auto insurance. It’s very attractive to them to find affordable housing near both school and work. Even better if they can walk, bike or bus to their destinations.
Advertising your college housing is easy and even free. Just post your rental properties at the schools. Talk to key figures like head of the debate team, the quarterback or university newsletter or blog.
I like to help new real estate investors, I have no problem will small private investors acquiring properties to utilize as college housing for rental income. What I don’t like are large real estate investing companies flush with capital that swoop in, purchase all the properties they can at discount and charge a premium to students.
There’s an interesting brewing debate over this. I came across an article “The Dorm Debate” on New Jersey Monmouth University’s student-run online newspaper “The Outlook”. In this article, college students are raising the question; should universities provide affordable college housing?
Source by Greg Hancock