Buying a Summer Home/Student Rental Property (Portland: renters, HOA)

[jngreenlee]

Hi All,

We're from Austin and got this hair-brained idea on how to escape the summers...buy a condo/townhouse near PSU and OHSU, furnish it, come stay from June 15 - Sept 15 each year, and the rest of the year, offer it up as a 9-month lease to students.

What do you think? Our goal is not to make the rent completely pay for it, but rather offset what we can, so it becomes a 'cheap' summer home, cheaper than AirBnB or hotels anyways.

We know the climate, downtown only, not the other neighborhoods, and have a bunch of family nearby, so we are committed to coming every year.

The sort of place that might rent well to students, and I THINK pull in $2500/month rent while college is in:
4215 SW Kelly Ave, Portland, OR 97239 - Zillow

Can anyone here chime in about what is considered 'too far' from campus? Student rental prices?

[Nell Plotts]

Most condos Assns have limitations on the number of rentals because of restrictions by lenders and some may require that renters sign a one year lease. I suspect that townhouses don't have that restriction but keep in mind that a mortgage lender may be more willing to lend you money on a second home than a home you rent to students.

Need I list the reasons why they aren't anxious to have students as neighbors? Students can be very hard on rental housing. The exceptions would be medical students, Interns, Residents.

Too far is more a matter of transportation than distance. If it isn't bikeable, takes more than 30-40 minutes by transit or the transit operates only during commute hours then it is 'too far'.

Actually your idea isn't half bad, you would need to be very careful selecting your renters. I know parents who have purchased a condo for their kids to live in during college. When they graduated it was their cousins, then they sold the place for a tidy profit to parents with a similar plan. Over time the other condo units were 'managed' similarly and grown-ups retreated.

[jngreenlee]

Nell, you make a good point about condo associations, we currently are in one in Austin that prohibits first-time leases under 1 year, and for good reason IMO.

With that in mind, I think that a house with small or low-maintenance yard OR townhome with no full-on HOA is really best suited for this. Oh, and a good property manager!

[AndyAMG]

Some additional things to consider. $2500/mo is hard for a student to come up with. It would be a total of around 2.8k a month by the time you add utilities and the normal bills that go with a place to live. I'm not saying it's not possible, I'm just saying it's a high price point for who you looking at attracting. How many kids are you willing to let live there? OHSU is a good bet but... the 9 month thing may not work for everyone. You can't move a professional couple or family in for 9 months then tell them they have to go somewhere for the summer. You have a lot of turnover and you may go through some dry spells. We own another home here we rent out. The couple that lives there is a professional couple and one works at the VA hospital and the other works at some computer place. They were looking at expensive rentals close to work but ultimately decided on my house in St.Johns for $1400. Next year will be $1600/mo but that's still $900 less for an entire home with a good walk score of 86. The tenants are willing to stay, they love St. Johns, I miss it honestly.

If I were you I'd test the water, do a poll or something, see how many people are interested at that price and with that 9 months on 3 months off deal. The house is awesome and $2,500 is a good price, but the timing thing may not work.

My Wife owns a home in Tucson and we had the same idea for retirement. Winter in Tucson (and Summer in Portland May-Oct, or just come and go as we please, I need some snow capped cascades. The family we were renting to got orders and had to move out unexpectedly. Military Clause. We could not fill the house during the summer we didn't get someone in it until Dec, Tucson was dead and house 2 times bigger than ours were less per month. It killed us! So many things came up at one time. From the tone of your post you will require a mortgage.... tread carefully with not making a profit of your renter, and remember 10-12% goes to the manager and I had to replace the A/C unit in Tucson.... big money.

I would say don't be so ambitious at first. Something cheaper, in an up and coming neighborhood. Rentals don't stay vacant long but the price point is important. $2000 seems to be the upper limit for the average middle class family. If you aren't clearing $6k a month 2k is hard to swallow.

Long distance, a property manager is a must even locally I use one.

Good Luck.

[oregonwoodsmoke]

I think it is a good idea, if you can find a suitable property.

Plan on spending the first few weeks of your vacation repairing the damage done by the students every year.

[jngreenlee]

Thas for the encouragement to several of you here - We really want to do this, looking seriously now at the "Corbett/Terwilliger/Lair Hill" neighborhood. This looks like it has good highway and transit access, plus proximity to bridges and the schools.

Any opinions on that area?

Interestingly, we checked on AirBnB and there's no short term rentals in that area - a possible alternative to renting out to college students.

[jngreenlee]

Originally Posted by AndyAMG

Long distance, a property manager is a must even locally I use one.

Good Luck.

Would you be able to make a reference later on if this materializes?

[jngreenlee]

Wonder if the dudes in the kitchen photo come with this house and will prepare late night quesdillas?

3303 SW 1ST Ave, Portland, OR 97239 | MLS# 13295302 | Redfin

[Rob Allen]

I can walk to that house from my office. If you'd like, I can look it over on my lunch hour and tell you what I think via Direct Message.

[jngreenlee]

Thanks Rob, the photo in that one was funny, but we'd pass on it for something newer. Could be a good income property, but we'd have a hard time staying there in the summer. Call us snobby!

Just to keep things interesting here though, we are taking a hard look at this one:
4542 SW VIEW POINT Ter, Portland, OR 97239 | MLS# 13517995 | Redfin