Pros & Cons of Investing in Student Housing

REAL ESTATE
Pros & Cons of Investing in Student Housing
As the days of summer fade, a multitude of students will be racing toward the adventure of a postsecondary education.

For many students, that will mean life without their parents’ ever-watchful eye on them. For investors, it means an opportunity to realize a positive cash flow by renting to this ready-made housing market. If you’re considering investing in student housing, first weigh these pros and cons.

Pros

Rental rates can bring in an extensive cash flow, as some students are only looking for short-term rentals during the school year. Flexible lease terms and campus accessibility will provide added value to students. They will be willing to pay more for these conveniences.

As a result, you should realize a premium in the amount of rent you can charge for the house. For example, a five-bedroom home close to university X may rent to a single family for $2000 per month. The same five bedrooms might be rented to separate students for $700 each, for a total monthly rent of $3500. This is a net premium of $1500 per month.

Tenant selection is often easier with student accommodations. Parents or guardians often cosign for the lease, which limits the landlord’s liability for missed or late payments. Also, the closer the property is to campus, the greater the pool of student tenants you have from which to draw.

The rental cycle is predictable. Although there is a higher turnover rate with student rentals, the market fluctuates with a regularity that other rental properties do not have. Spring will tend to be your peak move-out period, and fall brings the students back, looking for their new home away from home.

Cons

It can be time-consuming. Student housing tends to have above-average turnover in relation to other rental property types. So, for a typical five-bedroom student accommodation, this means application review, tenant interviews, and pre-lease inspections will take up more of your time than if you simply rented the house to a single family.

Maintenance and cleanliness for young people with limited experience outside of their parents’ supervision can present challenges for property owners. You will need to clearly identify everyone’s responsibilities regarding upkeep around the home. Each renter should be aware of garbage and recycling pickups, as well as what to do in the event of a deficiency with the property.

As you will be dealing with students, keep in mind that you should be prepared for some atypical maintenance calls, such as “my internet stopped working.” It may also be necessary to do some sort of visual inspection on a regular basis to keep the property in good working condition.

Additionally, yard maintenance and parking should be clearly outlined within the lease agreement. Some cities do not permit overnight street parking, while others have limits to how many vehicles can be parked on-site. This might pose challenges in the college setting. You must use municipal zoning and property standards as guidelines to ensure that your property remains in compliance.


HOT BIZ TRENDS
Make Your Meetings More Meaningful

Pointless, endless meetings are the bane of the workweek. But meetings don’t have to be a boring waste of time. Use the following tips to make your meetings more productive.

Start with proper preparation. Before calling a meeting, have a clear purpose, a well-defined agenda, and specified outcomes that you want to achieve. Limit the scope of the meeting to two or three topics or objectives.

Make sure everyone has all the information they need prior to the meeting, and set an expectation that attendees will have read, reviewed, or prepared necessary materials in advance.

Schedule the meeting for no longer than it needs to be, and don’t feel compelled to use all the time allotted.

Bring the right people together. Make sure those who need to be in attendance are present. If certain details concern only a subset of the group, hold those discussions in another meeting.

Begin on time and be disciplined about maintaining focus. Take it upon yourself to set appropriate amounts of time for each topic and to keep the discussion on track. If necessary, use phrases such as “We need to move on,” or “We’ll address that at a later time,” to steer people back on topic.

Make sure everyone leaves the meeting with a clear sense of what was accomplished or decided and what needs follow-up.

Finally, consider holding stand-up meetings. These meetings tend to be shorter because people are less likely to pontificate when they can’t sit down.


MANAGING
Boost Your Cybersecurity with Password Best Practices

Passwords may be annoying, but they are key to protecting personal information and private documents. In a business context, passwords guard financial data, intellectual property, trade secrets, customer lists, and more.

Passwords are cheaper and more convenient than other forms of authentication, but they can be cracked in a number of ways. User devices may be compromised with malware or a keylogger. Passwords can be ascertained using a word list or dictionary program that breaks the password by brute force. They can be deduced through sniffers, which look at raw data transmitted across the net and decipher its contents.

Knowing that passwords are vulnerable to cracking, it’s important to practice good password hygiene. Use these best practices for your own passwords, and instruct employees to do the same:

Don’t use common words, proper nouns, words with numbers tacked on, foreign words, or words that are written backwards. Password-cracking programs are adept at processing letter and number combinations until a match is found.

A password should not include anything related to your name, nickname, name of a family member, favorite team, or pet. It should not contain any recognizable numbers like phone numbers or addresses.

Increasing the number of characters in a password significantly enhances security. Each additional character multiplies the possible combinations, making the password far more difficult to break.

Choose passwords that are not easily guessable. Think in terms of passphrases rather than passwords. Choose a phrase that is easy to recollect, then convert some of the letters into other characters (e.g., substitute the number “3” for the letter “e”).

Avoid using the same password on multiple accounts, and never disclose a password to others unless they are authorized to have it.


REAL ESTATE
Aging Population Creates Investment Opportunities
As we age, our priorities and expectations evolve. To investors, these changes signal a growing marketplace and an opportunity to expand their investment portfolio. For those interested, several options exist for investing in senior housing. Following are three you may wish to consider.

Independent Living Facilities: Of the available investment options for senior housing, these facilities offer the most hands-off approach. In most respects, they function much like a traditional condo or apartment complex. These premises are attractive to seniors with an active lifestyle. Residents in this type of accommodation require less medical attention. As a result, the property owner is subject to a lower level of regulation than in some of the other senior-oriented investment options.

Assisted Living Facilities: These are ideal living situations for residents who may need additional assistance with housekeeping, meals, and some medical oversight. As a result, operating costs may be higher than those of independent living facilities, and there will likely be additional oversight that requires owner compliance. The expanded services required to run this type of facility allow the property owner to charge a premium rate to recover some of the additional costs.

Nursing Homes: This type of facility is necessary when the residents need around-the-clock medical care. Depending on the facility, the residents may share a room with as many as three other residents. Due to the level of care required, this type of facility has the highest operating costs and comes under the greatest level of government scrutiny.

SA Realty Watch Group
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This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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