Can You Refuse To Rent To College Students
No. A landlord is not permitted to reject to rent to a student based on their age.
And Fair Housing is a law that protects specific characteristics to ensure that certain groups are not disadvantaged in the housing market, and age is one of the protected characteristics.
Some states, such as CA, do not allow landlords to refuse to rent to a tenant based on arbitrary characteristics.
When To Hire A Property Manager
Rental property owners can manage the property themselves or hire a property manager. It can be a hard decision to make because property managers typically charge between 8% and 12% of collected rents, which can really eat into profits.
Still, hiring an experienced property manager can be well worth the cost. After all, it means less work and fewer headaches for you, as you take advantage of their industry expertise. In general, a property manager will:
- Know how to market the property
- Understand the local rental market and ensure you price the rental accordingly
- Show the property to potential tenants
- Screen tenants
- Collect rent on your behalf and deposit the money into your bank account
- Handle late rents and navigate the eviction process
- Handle tenant complaints
- Arrange maintenance and repair work
- Pay property-related bills, such as property taxes, utilities, and insurance
To decide if hiring a property manager makes financial sense for you, ask yourself these questions:
Are You Ready To Become A Real Estate Investor
Investing in real estate can be very profitable, provided you do it the right way.
Real estate is a people business and one thats constantly evolving, so its important to focus on short-term achievable goals to build long-term sustainable profits. Expertise, planning, and leveraging todays technologies to find the best deals are three things successful real estate investors do to stay one step ahead of the competition.
When youre ready to become a real estate investor, start by signing up for a free account on Roofstock. Once you create your search criteria, well notify you when we have an investment property that matches what youre looking for.
This article, and the Roofstock Blog in general, is intended for informational and educational purposes only, and is not investment, tax, financial planning, legal, or real estate advice. Roofstock is not your advisor or agent. Please consult your own experts for advice in these areas. Although Roofstock provides information it believes to be accurate, Roofstock makes no representations or warranties about the accuracy or completeness of the information contained on this blog.
Recommended Reading: How Much Is Berkeley Tuition Per Year
Positive Reasons For Investing In Student Housing
1) Relatively recession proof. When the economy turns down, more people go back to school. During the 2008-2010 financial crisis, MBA applications surged 50%.
2) Stability of cash flow. Whether in a bull market or a bear market, student housing supplies a reliable cash flow stream so long as the university is in good standing.
3) Enrollment continues to increase. Between 2000 and 2015, enrollment in U.S. undergraduate degree programs increased by 30%, from 13.2 million to 17 million. By 2026, that number is expected to increase to 19.3 million. There is an insatiable demand for a college education.
Evaluate Your Debt Before Investing
Not all debts are created equal. Before you invest a penny, take a close look at your debts.
If you have credit card debt, your next step is a no-brainer: Pay it off before investing money elsewhere. Try these tips to help you pay off your credit card debt fast.
Student loans are less cut and dry, and whether to keep them or pay them off depends on your interest rate. According to the U.S. Department of Education, the average interest rate for undergraduate student loans is 5.05% for graduate student loans and 6.6% for professional student loans.
Historically, stock markets have returned an average of 7% to 10% per year. But stocks also come with volatility and risk, while paying off your student loan debt offers a guaranteed return. Whether to invest your extra money or pay off your student loans faster comes down to your personal interest rates, risk tolerance, and financial goals.
A good rule of thumb is to keep your loans under an interest rate of around 6% any higher than that, and your priority should be paying off your debts. Better yet, if youre still a student, look for ways to reduce or avoid student loans altogether.
Recommended Reading: Are Summer Classes Worth It
Investing In Real Estate During College
Being a college student means multitasking between attending your classes and looking for ways to pay back your overflowing student loan. While these setbacks can seem like a challenge to figure out, getting an extra source of income will come in handy in setting you up for future financial success. One venture that will be worth your while is getting into real estate investment.
The first strategy that will help you get into real estate investment is house hacking. This may involve buying a property of your liking, with examples being multifamily homes or condos that speak to your style and income preference. You can live in one of the units and rent out the rest to other students or tenants. Airbnb also serves as another area in which you can invest your spare units. The rental income you get from this venture can help you pay your utilities, leaving you with enough savings to purchase other properties.
If you settle for a mortgage to purchase your property, you stand a chance to benefit from increased equity, helping you buy another investment down the line. In addition, numerous alternative lending programs are currently available in the market, helping you get quick access to funds. You can also choose to partner with family, allowing you to get the most of partners with solid credit scores for better investment opportunities.
Real Estate Syndications
Next Steps: Do Your Due Diligence
If you decide buying rental property in a college area is right for you, you can line up financing and start your search.
Once you find a real estate property of interest, do your due diligence to make sure its a sound investment.
Youll want to investigate several aspects of the property:
- Make sure it makes financial sense as an investment
- If the property was previously or is currently rented out, check for a rental certificate and ask the property owners for rental income, expense, and lease information
- Check environmental hazards
- Get the property inspected
- Read the covenants and restrictions for the neighborhood/HOA and verify the property can be rented
- Do a title search
Recommended Reading: College Bed Size
Automate Electronic Rent Payments
Forcing your renters to send or drop off a check in the mail could potentially cause more stress than just setting up automated online rent payments. If payments are required to be automatic, you are ensured to always receive the rent payments on time and in full and never have to stress about reminding them to pay you.
The Time Frame Is Right
Real estate isn’t a great short term investment. But it can be a great investment in the 10-20 year range, about the period of time over which you ought to be saving for college. That’s enough time to spread the transaction costs out over many years, get some reasonable appreciation, and pass through at least one bull and bear market.
You May Like: Umaine Book Buyback
Take Advantage Of Open Houses For Lead Generation
You might hear people say that open houses are not worth it or they dont lead to a sale. Ignore them. Open houses have sign-up sheets that generate leads, and that makes them cost-effective marketing tools. All an open house takes are sellers who are agreeable, a few hours on a weekend, and a sign. Most people cant resist an open-house sign. So, on the day of the open house, be prepared for traffic and lots of questions. Use the opportunity to showcase your expertise and market knowledge. If youre newly licensed and dont have a listing yet, you can still benefit from an open house. Often brokerages are full of busy and experienced agents who are happy for another agent to volunteer for the open house so they can do other things at that time. After talking with the listing agent, you are often able to follow up with names on the sign-in sheet.
All You Need To Know About Investing In Property In College Towns
Looking to learn about investing in rental property in college towns? Is it worth the risk? These are all questions many property investors seek answers to, whether you are new to investing or have been investing in properties for years.
According to Statista, approximately $4.5 billion was invested in 2020 in the U.S. student housing market. With that kind of money invested, student housing off-campus has led to the notion that rental property in college towns is a desirable option.
As you can see, buying rental property in a college town has its share of benefits. However, its only beneficial if you know what you are doing because its not like a typical rental property.
In this article, well discuss the following when it comes to investing in property in college towns:
- How stable college town investments are
- How such assets can be managed
- The pros and cons of renting to students
- If one or more tenants are beneficial for rental properties
- Picking the right property to invest in
Don’t Miss: Cheapest Community Colleges In Illinois
How To Get A Mortgage For Rental Property
Though a rental property mortgage is basically the same as a primary residence mortgage, there are some key differences. For starters, there are higher rates of default on rental property loans because borrowers facing financial troubles tend to focus on a primary home’s mortgage first. The added risk means lenders typically charge higher interest rates on rental properties.
Then there are the underwriting standards, which tend to be more strict for rental properties. In general, mortgage lenders focus on the borrower’s credit score, down payment, and debt-to-income ratio. The same factors apply to rental property mortgages, but the borrower will likely be held to more stringent credit score and DTI thresholdsand a higher minimum down payment. Additionally, the lender may take a closer look at the borrower’s employment history and income and want to see prior experience as a landlord.
In general, here’s what lenders require from borrowers to approve a rental property mortgage:
Real Estate Becomes Less Risky As Time Goes On
Leveraged real estate investing automatically becomes less risky the closer you get to your goal, simply as a result of amortization of the loan. You don’t necessarily need to add bonds like many automatic 529 options in order to lower risk. If you use a 15-year mortgage on the property, it may even be completely paid off by the time the kid enters college.
Also Check: Mortuary School Virginia
Why College Town Investing Is The Best Start For Newbie Real Estate Investors
Let me introduce you to college town investing.
Now you might be thinking, College students? Dont they throw crazy parties and trash your house?
My reply to that is, actually, no.
Over the last five years of investing in this market, I havent had to keep anybodys security deposit due to home damage from a wild party or any other event. And I have 17 to 18 tenants per year.
Lets get into some numbers.
Most real estate investors leave half of their cash on the table when they rent out their house as a single unit rather than renting by the room.
One of my houses would have made only $1,419 if I rented it out as one unit. But after adding two more bedrooms, I can rent it for $3,110. Because I own four of these houses, Im now making $10,755 per month in rental income.
It wasnt always like this. I started out as a typical pharmacist. I graduated in 2015 with my Doctorate of Pharmacy and worked two jobs as a retail and hospital pharmacist. I quickly realized that I didnt want to work as a pharmacist until I was 65 after talking to one of the older pharmacists who told me, Honestly I just come here for a paycheck now. I wish I could have retired a lot sooner. I realized that although typically pharmacists make over six figures, this alone isnt enough to achieve financial independence.
Soon after I graduated, I decided to work a lot of overtime to save up for my first down payment, which I used to buy my first rental in 2016.
Youre Our First Priorityevery Time
NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.
You May Like: Berea College Online Degrees
Benefits Of Real Estate Investment
If it fits within your financial plan, investing in real estate is a great way to save for your childrens college expenses. Real estate is almost always one of the safest investments around and it can benefit you in multiple ways:
- Cash FlowIf you invest in an income property , you can be earning supplemental income that you can then invest elsewhere to make even more money over time.
- AppreciationIf you buy property when your child is born, were talking 18 years of appreciation. The value will most certainly go up during that time, perhaps by quite a large amount. When your child is ready to go to college, you can sell the property and use the profits to fund their education. Or, you may be able to cash out some of your equity in a refinance loan or home equity line of credit to hold onto the property while simultaneously covering their college expenses.
How To Invest In Real Estate
14 Minute Read | September 27, 2021
Buying real estate is a popular way to invest, andif you do it rightyou can make some real money! You know why? Because property is valuable. As Mark Twain put it, Buy land. Theyre not making it anymore.
Studies show that most Americans think real estate is a great long-term investment.1 So, what holds people back? Lets be honest: Investing in real estate is a big commitment that requires a lot of time and moneyits serious work! And its important to fully understand how to invest in real estate before you dive in.
All rightits time to talk strategy. What are the different types of real estate investing? And how can you make money in real estate?
Also Check: Colleges That Accept Low Gpa Students
Option : Hire Your Kids
Behold the better college savings plan for you and your child: hire your kids.
You can deduct payments to folks you employ. And who says those folks cant be your kidsand they cant start saving for college super early? When you hire your child in your business, you get to pay them for services rendered and subsequently deduct those payments on the federal and state tax levels.
Again, each dollar we pay our child qualifies for a federal and state tax deduction. Thats already a better start than a 529 plan.
Does your kid have to file a tax return? Not if you pay them less than $12,400! You see, everyoneyes, everyonegets a standard deduction of $12,400 . If anyone earns less than their standard deduction, they dont have to file a tax return. So, your child literally receives tax-free money that you received a federal and state tax deduction for.
Lets put some numbers behind this: You pay little Sam $6,000 for services they provided to your rental portfolio for the year. Your federal tax rate is 33 percent, and your state tax rate is 8 percent, so your total tax savings on this $6,000 is $2,460or $6,000 times 0.41. Your child receives the entire $6,000 tax-free.
There are also likely to be earnings in the Roth IRA by the time the child goes to college, which cant be withdrawn without penalties unless they are a qualified distribution. However, a first time home buyer can withdraw $10,000 and not pay taxes or penalties.
How To Invest In Real Estate As A College Student
Investing in property isnt just something you can do while studying, but many young people do it in different ways. Here are four strategies for beginning your real estate investing career while still a student. You can start working to create your financial future today. Lets learn how to invest in real estate as a college student.
While college life is full of classes, parties, and reunions, some students want to gain financial independence by investing in property. However, investing in property often seems nearly impossible for students. This is mainly because students generally have limited resources, time, credit, and a limited professional reputation.
However, people of all ages can make money with real estate, including young investors just starting. Real estate investing can quickly put you on the map and secure your financial future if you are a student.
Read Also: 5 Year Rule College Credits