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Renting out a house in a university area?

  1. Apr 29, 2017 #1
    My wife and I might move a bit closer to where I am working. We love our house, sort of. It needs lots of work, but we don't have much time to work on it, and we have an ineffective HOA. We might actually have MORE money to work on it if we instead rent an apartment (closer to work) and rent the house out.

    It's 2 miles from where I attended university. Prime for college students, and, no offence to the younger ones here, I would really prefer it to be older students or graduate students. It's a very nice neighborhood of mostly professionals and professors.

    We would like to be very good and effective landlords if we do this. We don't need to profit.. We want to a) pay the mortgage and HOA fees and b) put any money over that amount directly back into the property either to do the repairs that need doing or any emergencies that crop up.

    So my questions are

    a) any GENERAL advice on renting properties?

    b) any specific advice on renting to a target market without discriminating? I'd love to see upper level students or grad students or post-docs in here. I could leave the huge whiteboard up in one of the bedrooms that has served as an office for me. But of course I don't want to have to refuse people simply because they don't fit my ideal.

    c) How to be a good landlord? I've had bad ones, so I know how NOT to do it. My goal is to put aside enough money to be able to respond to requests in a timely manner.

    d) Is there an app for that? I thought it'd be cool if there was some sort of smartphone app where a tenant could put in service requests and attach photos for anything that was wrong or needed attention.

    e) if d is "no" who wants to make an app? :)
     
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  3. Apr 29, 2017 #2

    MarneMath

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    My wife and I own a few rental properties. A few in Atlanta and one apartment in NY and a cabin in upstate NY.

    As far as general advice, keep the extra money you get once you pay your base cost for the house in a separate account from your personal one. No one cares more about your house than you do, and believe me, it'll show. Between renters, you will have to basically, repaint walls, tear out carpet, pay for lawn service, and cleaning services (or attempt to do all this yourself.) On top of that, you might have to fix broken windows, doors, replace locks, etc. If possible put the house into an LLC.

    B). Advertise to your target market, but legally you cannot reject people due to age, sex, etc. What you can do is offer a discount to graduate students or students near graduation. For example, our apartment in NY is intended for students at NYU. So our rent is 4000 a month for a 3 bedroom. Clearly far to much for a single person to pay (usually) but for three students it's manageable. For six, it's even better :). We even allow semester leasing since that's appealing to students.

    C)You're legally required to fix certain things. Heat if below a certain temp, AC if above certain temp, power issues, etc. Find out what your state requires. Also some states require that you have a certain amount set aside for issues at all times. In Georgia, each property is required to have 300 dollars in an account for issues.

    D)Probably is, but I tend to find email and photos work find for most people.

    Here's more generic advance.

    1. Most new landlords want to be "nice" and forgiving and understanding. Don't be. If rent is due on the first and after 6 days there's a 300 dollar fee. Stick to that no matter what. Once a tenant feels like they can get away with being late, it's no longer a big deal to them.
    2. Check on your property. New landlords, tend to want to give tenants privacy, and that's fine, but do announced and unannounced visits. Some landlords think that if the tenant pays on time and has no complaints it's good. However, the WORSE tenant I ever had was one that paid early, never bugged me, and generally keep to himself. I did a random inspect 6 months into the lease, and found the yard hasn't been cut in months. A window with plastic covering a hole. The basement door busted. A hole in the ceiling and the a missing microwave.
    3. If possible buy into a legal fund with other landlords. Evicting someone is painful. It's costly. It's hard.
    4. If you find a good tenant, value them. I have a family in one of my properties in Atlanta for a few years now. The market has gone up there and I could easily charge 400 more than I do now, but they take good care of the house, and made themselves part of the community. I've only raised their rate once by 100 dollars to account for a property tax increase. That's it.
     
  4. Apr 30, 2017 #3

    Borg

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    I have a friend who has had as many as 30 properties. MarneMath is echoing exactly what my friend has told me over the years. You can make good money renting your property but you have to be very careful. Don't cut the bad renters any slack and the good renters are your best asset. One other thing that my friend does is to not dress up and drive a crappy car for inspections. He says that he does that so that the tenent doesn't get the idea that he's rich and doesn't need the money.
     
  5. Apr 30, 2017 #4
    Consider getting a property management company to tend to your property. That gives you someone local for the tenant to contact and someone who will at least drive by the property to eyeball its status.
     
  6. Apr 30, 2017 #5
    Thanks a million for the replies so far. Not much time to reply in detail but I am reading. Thanks
     
  7. Apr 30, 2017 #6
    I think it would be a good idea to find out exactly what it takes to evict someone in your area so that you are aware of what you might lose if you have to evict someone. Here it costs something like $250.00 to file the paperwork to get someone evicted, and then it can take up to three months to actually get them off the property. So, you lose the $250.00 plus three or more months income. In other words, one single eviction scenario might end up putting you behind rather than ahead financially.

    The other thing that might be an issue is the HOA and your neighbors. Does your HOA allow this rental situation? Are the neighbors going to object to the presence of strange "unofficial" people, with extra cars, living in the neighborhood?
     
  8. May 3, 2017 #7

    StatGuy2000

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    Question for you, @zoobyshoe. When you state that it can take up to 3 months to actually get someone evicted and off your property, are you referring to evictions due to reasons other than non-payment of rent from the tenant? Normally, I would assume that tenants not paying rent is an easy reason to get someone evicted quickly.

    BTW, I live in Canada, and so I don't understand what is an HOA. Could you explain this to me?
     
  9. May 3, 2017 #8

    Borg

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    HOA - HomeOwner Association

    The Wiki article on Eviction gives a decent description of the processes and rules that landlords have to go through to evict a tenent (for any reason). It's not generally a quick process.
     
  10. May 3, 2017 #9
    Ignorance is bliss.

    Basically it's an organization a homeowner pays their money to to take care of the exterior areas of the property, but which instead generally serves to nanny the homeowner about keeping the property looking neat and tidy but which doesn't actually do any of the work you pay them for. HOA fees range from $60 a month in some places to $500 and sometimes more. We pay about $250.

    -Dave K
     
  11. May 3, 2017 #10

    MarneMath

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    @StatGuy2000 The reason eviction take so long is because of the mandatory notice period and court process. For an eviction without case, you must gave a 30 day notice. For an eviction with cause, such as nonpayment, you must give notice, file a case, summon the party to court, go to trail. If the tenant fails to show, then usually the process is only 5 weeks. If the tenant shows and offers a counter argument for cause, then a court case can drag on. Lastly, once an eviction is success, judges may give the tenant a week to 4 weeks to move out completely. In either case, when planning an eviction, prepare to get nonpayment on your property for 3 months.
     
  12. May 3, 2017 #11

    Borg

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    It doesn't guarentee a good outcome but my friend also runs a credit check on perspective renters. He adjusts the amount of the security deposit on their credit score. If they have good credit, he may require only one month's security deposit but, if it's really bad, he will insist on up to three months which can help cover the missed rent during an eviction.

    I seem to remember that he was also able to check past evictions against them as well. Some renters will 'rent' a property until they are officially evicted and then move on to the next unsuspecting landlord until they are evicted again all while never paying a dime in rent.

    In all cases, my friend begins eviction processes without exception whenever a tenent is 5 days late. The process is long enough without adding a month's worth of excuses to it.
     
  13. May 3, 2017 #12

    StatGuy2000

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    The closest we have to a HOA (as defined in the US per the Wiki article) at least in the Toronto area would be condo associations which manage our property. I have read that some neighbourhoods in Western Canada have something akin to a homeowner's assocation, but in the province of Ontario, I don't believe it exists (except possibly in the most recently built homes), but I could be wrong about that.
     
  14. May 3, 2017 #13

    StatGuy2000

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    I found the following online article regarding the eviction process in Ontario, my home province.

    http://www.cleo.on.ca/en/publications/tenantsaccess/eviction
     
  15. May 3, 2017 #14
    Others have pretty much answered this. Just want to emphasize that a potential landlord has to find out exactly what is entailed in their particular area. The exact same rules do not apply across the whole US and different kinds of tenancies have different rules.

    "Kind of tenancy," is another potential pitfall: here in San Diego there are zoning rules about whom a homeowner can rent to. Specifically, in any neighborhood zoned "residential only," you can't take a multi-bedroom house and rent it out like a boarding house with a different lease for each separate tenant. The whole house has to be rented to one entity, presumably a family. A boarding house is considered a business, or some such, while a single family dwelling is a different kind of legal situation. It's a commercial vs residential zoning issue. So, if you want to install a bunch of separate, unrelated students in your house as renters, you might have to get one to be the actual main renter, the official, legal "resident," who would then, at least on paper, sublet to the others. Here a person can sublet rooms in their "residence" to as many as three unrelated individuals. Doesn't matter if you own or rent your "residence." What matters is that you actually "reside" there. The fact you, Dave, want to completely move out means you can't call it your residence anymore and can't separately rent extra rooms to unrelated people. You have to rent the whole place to some single "resident" to legally prevent it from being defined as a business.

    That's here in San Diego. You have to find out exactly what your local laws/zoning rules are. It's always best to do things completely within the law. "Under-the-table," violations could be exposed if, for example, a neighbor complains that there seem to be too many unrelated people coming and going and the building inspector shows up.
     
  16. May 4, 2017 #15
    Talk to some local landlords who are renting to the same market. There are combinations of student attitudes and local laws that might make the landlord situation much less appealing than you imagine. Undergrads at a lot of colleges are among the least responsible tenants in many markets. It may be your cup of tea, but it certainly isn't mine.
     
  17. May 5, 2017 #16
    Thankfully there is a lot of housing in our area that is targeted specifically to college students that are somewhere between a dorm and an apartment. Undergraduates tend not to rent houses or "regular" apartments in our area. I'm not sure the exact reason.

    In our neighborhood most of the renters, if they are associated with the university, are either professors or graduate students. So this is who we (should we move forward with this idea) intend to target. My super ideal would be that just by word of mouth I'd get somebody from the math department. Everyone knows math people are harmless and not demanding. :)

    -Dave K
     
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