Starting up rental property

[xayasouk]

Hi, I am curious too what are the requirements and necessities to starting up a rental property ie: apartment complex, housing, duplex, condo etc.

The town I live in is Iowa City, Iowa home to the Hawkeyes. It is a college campus that has a little more then 21,000 undergrads. Being in college, I realized their is a very high demand for housing outside of campus dorms. Many students want shared houses and apartments where they can have their own parties and not get fined from campus security (UofI is currently the #1 party school in the nations). The campus is very diverse from undergrads to international students. (Who are substantially wealthy, many drive high-end cars BMWs, Audis, Maseratis, have even seen a Nissan GTR)

My dad, brother, and I are interested in owning and renting out houses/apartments/condos/etc in the area. What are the sort of things that we should know about this before we start?

Thank you for your comments, time, and concerns in advance.

[TashaC.]

Welcome! I have been renting properties for about 5 yrs. Currently I have 4. I am in a college town myself and have found:

College kids are great because their parents or loans pay their rent.

They have very low standards except for safety. If the neighborhood is pretty safe, but the house is not very spiffy- a college kid will take it. So don't put in granite, ceramic tiles or even complicated landscaping (grass is fine, anything else will probably die unless you come out to water or fertilize it).

Even safety is flexible with them. These kids will rent in high crime areas where shootings are likely. I don't buy in those areas because of appreciation concerns, and because I actually feel a little maternal towards their safety. More like their MOM is going to be breathing down your neck concerned about neighborhood safety.

Expect to clean like a b---t on every move out. These kids don't clean. I don't even think they own vacuum cleaners. They will not spend their beer money on any cleaning supplies. Every time I turn over a property I spend 4 -8 hrs (or more) getting it ready to be re-rented.

Expect them to drag you into their drama. "So and so broke that window so don't take it out of MY portion of the deposit." "my room mate and her boyfriend broke up. He moved out and we cant afford to pay full rent on our own." "I failed out of school. I wont be returning next semester. Nice knowing you." I have heard all 3 of those stories and many more.

Expect repairs when they move out. I don't know if they are lazy, afraid or ignorant of giant moldy stains on the ceiling caused by a leaky roof. Even when it is right over their bed growing with every thunderstorm- they will remark "huh, I never noticed that." when you point it out to them. They are also ignorant about how garbage disposals work and will think that rags and silverware can go down it just fine. Since they never call you to fix anything, just know there are a lot of repairs coming on the back end.

College girls are generally afraid of bugs. If you talk about how to prevent cockroaches their eyes will glaze over and they will instantly think they are going to get cockroaches and not rent from you. Better just to wait for them to call you at 12am (because that's still totally appropriate time to call for these guys) saying she saw a bug and will you please come out to spray.

That's the big stuff. Enjoy your new adventure!

[snafu]

DH & I managed a 6 suite, small apt. bldg, near campus with mostly students as tenants. We required 1st & last months rent on move-in + damage deposit before giving lease to sign. I explained the 'rules' and had them repeat each but it's useless. Rules for landlords are tough. Tasha was kind. You need significant handyman skills plumbing, electric, painting etc. You need to be tough about all the stories to break even.