If you are a student landlord with rooms to fill, or thinking about embarking upon that journey, then listen up.  With an 8 bedroom house and 6 of those rooms to fill each year, my brothers and I learned a thing or two about attracting good solid roommates (tenants).  By solid I mean emotionally stable, dependable, honest, able to pay their rent, and able to resolve conflict like adults.  Now with 6 rooms to fill, we couldn’t always be so picky, thus I have more than a few stories to tell that won’t show up on this blog due to protecting the identities of those involved and protecting myself from injury or harm!

So in order to find good roommates, the more you have to choose from the better.  It’s a numbers game and the more applicants or interested parties you have, the better quality you’ll find and the higher rents you can charge.  Increasing the number of potential roommates is what we’ll discuss today.  Here are a few suggestions from those that have tried it all!

·        Create a Buzz – This takes times but will prove to be the most effective in the long run.  You’ll need to name your house or condo and start to call it that.  Our first house was named, “The Big Blue House”.  Not very creative, but it stuck.  Even when the color on the house changed, it was always “Big Blue”.  Some friends of ours lived on Cedar St. and called their house, “The Cedar House”.  It doesn’t matter what the name is, you just want people talking about it.  “Where is the barbeque this weekend?”  “Oh, it’s at The Cedar House.”  Then, as people rotate through the home each semester or year, you’ve got people asking the question, “Who is living at the Cedar House next year?”

·        Host activities, events or parties – This goes along with creating the buzz and it also takes some time.  You want people to know where you live and know your home.  Host barbeques, parties, birthdays or even study sessions.  Depending on what types of roommates you want to attract, cater your hosting to that demographic.

·        Use your network – In the days of social networking I’m not sure that I need to expound much on this concept.  Just put the word out there.  Throw it up on your facebook profile or twitter update.  “Looking for a roommate at the Cedar House next semester, let’s talk!”  Word of mouth is still very effective.  Just let your friends know and they will let their friends know, etc.  Several rooms of ours were filled by people we didn’t know personally, but who were friends of friends.

·        Go to the Web – www.craigslist.com is probably the most popular in college towns and it’s free.  You’ll want to update your posting every 3^rd day so that it doesn’t get buried.  Two other sites you might try are www.roommates.com or www.collegesublease.com .

·        Tear-off flyer – Every college town is filled with cafes, restaurants, book stores and campus boards that allow you to post items for sale or promote special events.  This is where you go if your network isn’t hooking you up.  Be very clear and specific about the type of roommate or roommates that you are looking for and put the flyer up in places you normally frequent.  We actually found a really great roommate this way from a tear-off flyer at Free Birds Burritos.  Ask some very specific “get to know you” questions and make sure you feel comfortable with whomever you are inviting to live with you!

·        Visit a local leasing office – I worked in a campus leasing office for a few years and was surprised at how many people came in looking for roommates and not apartments!  We never really had much to offer them.  Let your local leasing offices know that you will rent a room if someone comes by needing it.  You will have to offer them a leasing commission, typically 50% of what you are charging for rent, but well worth the investment for a good tenant!

That’s enough to get you started.  Be creative and choose your roommates wisely!  There is nothing worse than being stuck living with someone you can’t tolerate.

I apologize for those of you who reside outside the State of Texas.  Not because Texans are a proud people, but simply because you might not understand how boring the drive between Austin and Dallas/Ft.Worth is along I-35.  And if you don’t understand how boring the drive is, you might not understand the need for something exciting to do along the way.  At almost exactly half way between the two major cities sits a small town with a Big 12 identity.  The city is Waco and the university is Baylor University.

Baylor is the largest Baptist University in the Nation and the oldest college in the state of Texas.  Despite being around the longest, total enrollment hovers at just over 14,000.  What this sleepy town needs is some action!  Well, look no further.  At least look no further than a proposed and very ambitious plan to pump large sums of public and private money into this old town and the University that occupies it.

The brain child behind this large project is Developer Rick Sheldon and he’s got the high-tech animated video to push it.  (http://www.1000friendsofwaco.com/ ) The project includes significant development in Hotel, Retail, Parks & Public Areas, Bridges, Walkways, Convention Center, Marinas and a 55,000 seat domed stadium for those fierce fighting Baylor Bears.  There is also a very agressive project for expanding the I-35 bridge that connects North and South Shore of the Brazos River.

The overall project is way to comprehensive to cover in this post. What I would like to do is pose the question, “how does this affect the Baylor real estate market in Waco?”  Well, first of all, this project is a proposal at this point.  It would require significant cooperation from local, state and federal governments as well as significant private investment.  We’re talking easily in the Billions from start to finish.  At the end of the day, this dream might be a pill that is just too large to swallow.  So don’t go buying up land in Waco just yet!

On the other hand, if you’re interested in purchasing property in Waco, it might not be a bad reason to push you over the hump.  As with any investment, risk is conversely acquainted with reward.  The best way I have heard this explained is that “scared money don’t make money!”  I wouldn’t necessarily be the first one in on this land grab, but I would be careful not to be left out either.  Take a look at the master plans available, make some decisions on what areas will be the most desirable for a student whose focus is study but needs to get out and enjoy the city a little.  The seeds of change have been planted in Waco.  Vision is something that people respond to, even in tough economic times.  I would be real surprised if nothing came of this push to bring Baylor’s home town of Waco into the modern age of capitalism.  The picture has been well painted, now we wait and see if the paint dries the same color.

Change is hard for most everyone. And whenever it comes, you see people falling into one of two categories. There are the Optimists who see opportunity, possibility and potential. On the other hand are the Pessimists who see tragedy, consequences and fear.The small Boston community of Allston is no different.

Harvard has been eating up acreage across the Charles Riverin Allston for a long time. They began to invest more aggressively starting in the late 80′s with an official announcement not coming until the late 90′s on their 52 acre acquisition that included some industrial and commercial properties. Since that time it has been a bit more difficult to fly under the radar. Of course Harvard doesn’t announce their intentions at this point without knowing they have acquired the key pieces to their puzzle. So how come we didn’t see this coming sooner? All properties purchased by Harvard over the years were bought by a company that would keep confidential the identity of the actual buyer. This protects large investors from being taken advantage of and is not considered to be unethical in practice but often times necessary. It wasn’t until the change of the century that Harvard made public their private ambitions to grow and expand across the river and into Allston.

Since then, local residents have been asking to see final plans for the expansions and how it will impact current transportation infrastructure as well as other public services. Many residents fear that their comfortable and cozy neighborhood will be over-run with students and the collateral damage that comes with any large student population such as high traffic, high density and of course the bars and venues that students frequent.

I suppose those are fair questions and fair arguments. However we are talking about one of the most prestigious universities in the world moving into some new territory. If my primary concern is property value and investment potential for Allston, I’d say the upside is huge. Harvard has not begun their ambitious development plans as of yet due to economic uncertainties, but Harvard has always taken their time and measured their steps carefully before executing moves. Would you expect anything else from a university that has the reputation for being one of the best and brightest in the World?

Allston is not only home to Students attending Harvard University in Cambridge, but also a number of other universities including Boston University, Boston College, Northeastern University, MIT and Emerson College.

All said, if I’ve got plans to attend Harvard University or any of the other surrounding schools within Boston, I’d take a long hard look at Allston and see if there might be an opportunity. For updates on the project as well as development maps and information, you can visit the official website at http://www.allston.harvard.edu/ai.htm.

The days of 0% down have almost evaporated just as quickly as they came onto the scene several years ago. However, it has always been somewhat difficult to discover low money down programs in university real estate markets. In fact, most university areas posses some unforeseen obstacles that might not exist in other markets. It’s called warrantability. If you’re buying a house, it’s not something to be overly concerned about. But for most buyers looking in university markets, their price range limits them to a condo or townhome. Lenders evaluate risk on loaning money for certain properties based upon a specific criteria. Meeting this criteria is also required for the loans to be “conforming” and thus able to be sold on the secondary market.

Warrantability is affected by two primary indicators. The first looks at how many of the condos within a given complex or community are owner occupied and how many are investor owned. Typically, lenders want to see that over 50% of the ownership within a complex is held by owner occupants. The second indicator is how many units are owned by one single investor. If a single investor owns more than 10% of a complex it gives that investor an uncomfortable level of influence over voting issues. Condos are held as TIC’s or Tenants in Common. It’s a democracy of sorts that is governed by a set of approved by-laws. Any changes to those by-laws must be approved or voted on by the owners. An investor has one thing in mind, bottom-line. An owner occupant may have another, such as preserving the appearance, security, etc. So, if an investor is able to acquire a majority stake in a complex, whatever he wants goes. You can see how lenders are a little nervous with any one person having that much power over the value of their investment.

It’s easy to see why warrantability becomes such an issue in college real estate markets. Due to the number of investors who favor these stable markets, you get an unusually high level of investor owned properties.

Some condo communities do qualify for less than 20% down, but make sure that your real estate agent knows which ones those are if you are depending on going the low money down route. If the complex is warrantable OR you end up buying a house, the FHA offers one of the best loan products on the market called The Kiddie Condo. The kiddie condo program deserves its own post and explanation. So stay tuned for that one to come.

What do these three things have in common? Well, if you’re from Texas you probably guessed it. The new George W. Bush Library is slated to go down on the edge of the Southern Methodist University in Dallas, TX. The addition of the George W. Bush presidential library makes the 3rd to call Texas home, behind the Lyndon B. Johnson library in Austin, TX and the George H. W. Bush library in College Station, TX. Regardless of how you feel about the decision to locate the latest presidential library to SMU instead of somewhere like Midland or Waco, my question is how will this decision affect the SMU real estate market?

It’s safe to say that the collegiate atmosphere surrounding SMU has yielded some mixed emotions to the coming of this library. Not to mention the faculty AND the University itself who was at one time disputing the ownership of the proposed land to be built on. At this point, it appears that the library effort will move forward and even be completed by 2013.

This is an excerpt from the official website for the library…

“The site of the Bush Presidential Center occupies a prime location in the heart of a rapidly growing urban city in the middle of the country. Located just five miles north of downtown Dallas on approximately 25 acres on the SMU campus, the Bush Presidential Center will overlook the downtown skyline of Dallas and serve as the eastern entrance to the university campus.”

I bolded some of the key words that are “value vocabulary” when talking about any piece of real estate. The truth is, these descriptors are fairly accurate for this area and market. One thing is for certain; this area is already an expensive real estate market. With 25 acres being taken off the potential market, this perhaps makes an already tight market even tighter.

Although these presidential libraries are touted for their economic impact as a result of tourism and research, it begs the debate on whether the impact to surrounding real estate values will be positive, negative or completely neutral. Although average prices for real estate are high in this market, I believe that they have a ways to go. If you look at where SMU sits within Dallas, growth is constrained by several geographic barriers. Bordered on all sides by interstate and conveniently close to downtown, you can’t go far from campus without running into another sub-market. Both DFW and Love Field airports are also within a few minutes providing ease of travel for business or pleasure. I would say that regardless of how you feel about George W. Bush on a political level, the arrival of his library is more likely to drive surrounding property values up than down. I suppose that time will tell us.

With the state of our current economy, who is investing any money into the stock market?  Not that we have any spare change left to invest.  I suppose one could argue that the Market only has up to go, but I stopped investing in stocks back in 2001 when we last saw our fictitious wealth evaporate due to corporate mal practices (i.e. Enron, WorldCom, Arthur Anderson, etc.) and the implosion of the tech bubble.  So, that begs the question, unless you’re a day trader making millions on the market metrics and patterns, how do you save or invest for the future?

Well I wanted to propose one possibility in today’s blog entry.  More specifically, I want to speak to how my family is saving for our children’s future college education.  As the cost of living and tuition increases each year, so does the amount of cash we need to save in order to afford our children’s education.  Why not purchase your children’s future accommodations today?  It’s paying present value as opposed to future.  I know it sounds strange, and let me try to explain a little as the multiple “what-if” scenarios arise in your minds.

This whole investment model implies two things.  The first, is that you are living within or below your means.  More specifically, you aren’t biting off more than you can chew financially.  The second implies that you have the money to invest and the desire/risk tolerance to do so.

We have chosen Austin, the University of Texas, as the University that our children will one day attend.  We are admittedly biased to this fine institution of higher learning as alumni, but you’ve got to start somewhere.  Let’s suppose that our children have no desire to attend this school, no problem, there will be plenty of demand by those who do and we can sell our condo at an appreciated market value and use the proceeds in a 1031 exchange to avoid tax penalties and reinvest that money into a condo or home in a different college town.

In the meantime, we will be landlords.  If the position of landlord doesn’t appeal to you, think about hiring a management company to handle all the collections, maintenance, leasing, etc.

The truth is, with the deficit growing at an alarming rate, the government at some point will have to start printing more money.  When the money presses start rolling out new paper, this devalues the money that we hold as a result of inflation.  I predict that we might see liquid capital being rolled into hard assets to whether the storm.  Of course my guess is as good as anyone else!  Just something to get your college real estate minds thinking.

College students make up a large portion of the green movement that is picking up momentum here in the United States. Many of the future innovators and leaders for this young and exciting industry are students. As students, it is easy to feel like we are not able to contribute much in this effort of conservation but the truth is, there is much we can do even now.

I wanted to pass along a few ideas on how you can be involved right now, as a student, in doing your part for the green revolution while at the same time saving money. The following tips will focus on how to save money on your electric bill, which translates into less consumption of energy, which translates into less demand on the energy grid, which translates into less demand for new coal fired power plants, which results in less pollution, and so on.

Because most of you are renting student housing I will focus my suggestions towards what makes financial sense in that situation. However, there are some great suggestions and tips in the College Real Estate workbook on energy saving measures if you own your student housing.

Lighting- This is one of the easiest and most cost effective measures that you can employ right away. Most units have incandescent light bulbs that actually generate light by generating heat. They are extremely inefficient and even banned in many countries now. You will want to purchase some CFL’s (Compact Fluorescent Lights) at the local hardware store. The technology and price of these have come a long way and are now just as effective as traditional light bulbs. Every incandescent light bulb you replace will cut the cost of operating that light by over half. Now because most leases are one year, keep the old incandescent light bulbs if you want and take your CFL’s with you to the next apartment.

Heating and Air Conditioning- This is typically one of the single greatest consumers of electricity in a home. Upgrading to a new system is usually cost prohibitive so a simple way to improve the efficiency of your current system and therefore save money is to REPLACE THE AIR FILTER. Some of you don’t know what that is or that you are supposed to replace them every 1-3 months. The dirtier the air-filter the more work the unit requires to draw air through it. Not to mention that you breath that stuff back in. So, get a stack of new air filters and keep those changed out. Each unit is a bit different so be sure to copy down the filter size listed on your current filter before heading to the hardware store to pick them up.

Timers, Power Strips, and Phantom Loads- I won’t say much about phantom loads here but you can google it for more info. These are basically appliances and electronics in your home that draw power 24/7 even when they are turned off. VCR’s, Televisions, radios, and microwaves all have phantom loads. Ways you can avoid running your electronics all the time is to keep them on a power strip that you turn off when you are not using it. Try putting some of your appliances on a timer and don’t get the coffee pot that lights up like a Christmas tree even when its turned off.

I would recommend coming up with a letter to your landlord with a list of items that you are requesting in order to improve the efficiency of their unit. If the refrigerator is over four years old than make that your top priority request. You can ask them to cover the cost of replacement filters and CFL’s. Ask for more efficient shower heads and toilets. The worse that can happen is they say no. As a landlord myself, I would appreciate my tenants interest in improving my unit and welcome the opportunity.

These ideas are just enough to get you started. There are many ways that you can do your part in going green. Good luck!

As I drive up and down the drag at the University of Texas in Austin I often ask myself the question, “Does retail work in densely populated college markets?” We know that owning a home or condo in this niche market makes great sense in most cases, but what about retail? I think that the answer is yes and no. It really depends on what good or service is being offered. What is remarkable to me are the traffic rates that a small chunk of campus real estate gets exposure to. The problem is that most of those traffic numbers are poor college kids who would rather conserve their allowance for beer, groceries, or other necessary items.

In the past 10 years I’ve seen numerous well know chain stores come and go here in Austin. That includes a GAP, Barnes n Noble, Baja Fresh, Urban Outfitters, Tower Records, several coffee shops, and many others. All of these located directly across the street from one of the largest universities in the country, within a stretch of four blocks. What these stores are finding out, is that college students don’t make the best market with disposable income. Another thing that many of these retail outlets have in common is a large square footage demand. What appears to be working are the small and efficient floor plans with little room for students to loiter. Those who loiter are generally the ones who will order a small cup of coffee and spend the next 4 hrs getting free refills and occupying your HVAC space.

That brings up another important point, when heating and cooling a building, you are literally paying per cubic foot, and each square foot on the ground will add exponential cubic feet in volume. A good concept could result in a failed entrepreneurial endeavor simply by misjudging the space “requirements” needed to operate. A needed good or service, mixed with a solid space design that occupies small square footage will survive in a college town, the big boys…don’t count on it!

However, in some cases the strategy for a larger retail tenant coming into a college market is not motivated by economics but rather an attempt to create brand recognition or loyalty for these students who will one day graduate to a disposable income. So, in answer to the original question, I guess it all just depends. Meanwhile, I’ll keep driving through campus and watching the comings and goings of the latest effort to penetrate this hard and fickle market.

Having graduated from the University of Texas in Austin with a degree in Economics, I tend to think through the lens of micro and macro economies. This explanation should be really simple. If you think about the country as a whole and how it functions and what factors effect it’s overall production and growth you are thinking in a Macroeconomic capacity. You could even apply a macroeconomic perspective towards a city or state if you wanted to. The point is that it’s a general approach to the economy. A Microeconomic perspective is much more specific and begins to look at the many economies that exist within a larger macro economy. For example, within the economy of Texas we have the oil industry, banking, farming, ranching, technology, etc. Our overall macroeconomic perspective might be quite good if we look at job growth, GDP, and median household incomes. However, what a macroeconomic perspective won’t tell us in this example, is that the farming industry is actually losing jobs, the rising dollar hurts our ability to export and this aspect of our economy is a disaster! So, from afar things are all good, but if you begin to dissect the pieces of the economy you’ll find that some industries are doing quite well and others are not.

So why go to such an extent to explain economics? The beauty of campus housing or college real estate is that we enjoy the protection of a macroeconomic perspective but the benefits of a micro economy. The best way to explain this is to use an illustration that happened here in Austin around late 2001. The tech bubble had just burst and the .com era was over. Austin is and was heavily invested in the technology industry and as our high-paying jobs evaporated so did our housing industry. Most cities in the United States didn’t suffer as bad as the technology centers did during this recession. There was no one left to afford the glut of houses built for the barrage of engineers and business people that serviced these tech companies. However, despite the drop in home prices and the increase of supply on the market all over Austin, those properties in and around the University of Texas retained their value remarkably well. This was one of my first glimpses at how despite a recession in home prices all over Austin, there was a bit of a safe haven located at the core.

To understand how a campus or college real estate market can hold-up during a financial storm you need to understand a few concepts. Most of the owners of college real estate are not from or affected by the local economy. For example here in Austin, many of the condo and home owners are from Houston, Dallas, San Antonio or out of state. Those cities were not nearly as affected by the .com implosion as Austin was. They continued to flourish in banking, energy, medicine, etc while their children or their tenants attended the University of Texas. This widely varied demographic allows a university market to spread their ownership base. Another thing to remember is that universities all over the country are continuing to grow by leaps and bounds and are projected to continue growing at exponential rates. This shows an ever increasing demand for housing within these ever-tightening markets.

Are you lost yet? I hope not! As time goes on, your understanding will no doubt increase. As I’ve suggested before, if you haven’t read our real estate guide book now is a good time to take a look!

I suppose that an initial blog entry in most cases is one of introduction of the author and explanation towards the content. I know that this posting won’t be the most compelling piece of literature that you’ve read, but I hope to get the conversation started about College Real Estate and begin answering the many and varied questions that emerge from such a topic.

First of all, what do I mean by College Real Estate? I’m talking about any and everything related to College or University housing that includes investment as well as basic living necessities. College Real Estate LLC wants to be a resource to students, parents and investors when it comes to determining which campus housing areas are good investments to purchase in and beyond any financial benefits, we’d like to highlight the non financial benefits that come as a result of purchasing and owning property in university markets.

If you haven’t yet, I would encourage you to read the College Real Estate Workbook. This book will go into greater detail on many of the topics covered here in this blog as well as give a little background as to who we are and why we’ve developed such a passion for real estate and the micro-economic principles that apply in the unique environment of university or college-centered housing.