Renting to Students in Santa Cruz, Ca: Pro's and Cons

By
Real Estate Agent with eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales B.R.E. 01191194
https://activerain.com/droplet/57nH

I am a realtor and a Santa Cruz rental property investor since 2000. There are many reasons to invest in Santa Cruz rental properties, some of which I have discussed in this article. Today I want to talk about what the pros and cons are in renting to UCSC students. 

 

Here are the pros that I have experienced.

1. Vacancies are virtually non existent: There are almost $18,000 UCSC students and in any given year there is only room to house about 8,000 of them on campus. There are always many thousands of students looking for a place to rent, so the potential pool leaves no vacancies in your Santa Cruz investment rental properties.

 

2. Students pay more money:  They frequently will pay more per bedroom and sleep 2-3 in a room just to have a place to stay. Here is a link to what students expect to pay from the UCSC community housing page. https://communityrentals.ucsc.edu/cost/index.html

 

3. The rent money is very secure: The students get financial aid and/or are supported by their parents. In 17 years and 4 rental properties as a Santa Cruz rental home investor I have only had a problem getting paid once.

 

4. UCSC makes the rental process very easy for a Santa Cruz rental investor: They give workshops to the students on what they need to do to look attractive to a Santa Cruz rental investor. They come to you with complete rental applications, credit reports, references, and certificates saying they understand what it takes to be a good renter. The university posts your rental for free so you have a large pool of possible renters.

 

5. Students replicate themselves making the rental process even easier: My experience has been when one student moves out they have another take their place making the process seamless for the Santa Cruz rental investor.

 

6. Santa Cruz students are often long term renter: If you get the students early, in their sophomore or junior year they often stay for 3-4 years or more. making the cost of turnover very low.

 

7. Santa Cruz students can vacate in the summer if you want a summer beach home that is rented for 9 or 10 months: If you are a Santa Cruz rental property investor who wants a place in the summer for yourself you can rent to students during the school year and keep it for yourself in the summers. Many students go home in the summers, and the ones who don't can always find a sublet from another student who is going home. It is a way to have a vacation home that more than pays for itself.

 

Cons of renting to UCSC students:

 

1. Insurance on the house can be tricky: Recently many insurance companies, including the one I have always used, State Farm have decided they do not want to insure homes that are filled to the brim with students in college towns. They see them as Frat houses and won't write new policies. You can get commercial insurance, which is more expensive than residential or find the rare insurer who will do it. I found that CIG insurance out of Monterrey was willing to write a residential policy at competitive prices.

 

2. Large homes can be a hot bed of petty emotional issues for the Santa Cruz rental property investor.: If you are the owner of a large home with 6-10 students they may turn to you when there is a spat between the tenants. It is a time and emotional drain. I put one person in charge and have that person deal with issues like who is going to clean the house, noise complaints, bullying, etc. They have the final say. It works pretty well.

 

3. Students are often unaware of what it takes to take care of a house: Students do not always understand what it takes to care of a home and things can be damaged by mistake, even without large parties or Frat behavior. The way to ameliorate this is to buy a house that does not have delicate finishes and educate the students on basic home maintenance. My tenants know they need to call me right away if something is wrong and not let a small problem get out of hand. I would rather be over called than under called, and they know it.

So as a long time owner of Santa Cruz rental property I can enthusiastically say that renting to Santa Cruz students is a good thing from an investor perspective and not something to be afraid of.

 

If you have any questions about becoming a Santa Cruz rental property investor please feel free to contact me.

Marcy Moyer

eXp Realty of California

650-619-9285

marcy@marcymoyer.com

www.marcymoyer.com

Specializing in Probate, Trust, and Investment Properties

 

 

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Marcy Moyer eXp Realty of California  Specializing in Probate and Trust Sales, and Rental Investment Properties

 

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California Santa Cruz County Santa Cruz
Tags:
santa cruz real estate agent
santa cruz rental properties
santa cruz investment properties
santa cruz short term rentals
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Rainmaker
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Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I have shown parents properties nearly many local universities and have not yet found a unit that has not had unpermitted structures.  Parents thought it was cheaper to own than rent w/o realizing they are competing with cash investors who had the same idea. They also did not know it is extremely competitive and are unwilling to get into a better position.   If they want to buy Victorian homes in Ames, Iowa, Lafayette, Indiana etc let them go.

Oct 15, 2017 07:43 AM #1
Rainer
222,707
Caroline Gerardo
CMG Financial - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

I have a son at UCSC. It is SOOOOOOOOOO expensive to rent. I'm toying with buying. Some houses are a mess with deferred maintenance of 30 years. 

Students have more financial resources than the typical wage earner in this market (unless they work a tech job and drive over the hill then they can buy on their own)   

It is hard to find anything- no signs - rental agencies don't return calls as they know there are a 100 people behind waiting.

 

Jan 16, 2018 03:51 PM #2
Rainmaker
468,350
Marcy Moyer
eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales - Mountain View, CA
Probate, Trust, and Investment Specialist

Caroline the rental market in Santa Cruz is very tight. The vacancy rate is only 1.67% There are condos off Bay that are great to buy for student rentals, You can use the roomate rent to help pay the mortgage and by the time you sell you will have made your money back. I also may have some available rooms in one of my rentals for the fall of 2018. Let me know if you need more info.

 

Jan 16, 2018 06:07 PM #3
Rainmaker
468,350
Marcy Moyer
eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales - Mountain View, CA
Probate, Trust, and Investment Specialist

Sam, I own a number of rentals in Santa Cruz as well as investors who are renting to students. It has been very financially lucrative for everyone. One of my clients bought a condo near the University, had the mortgage paid for by their son's roomates. and sold it 2 years later when their son graduated and made 50K.

Jan 16, 2018 06:09 PM #4
Rainer
1,450
Bret Jones
Unknown company - Autaugaville, AL

Thank you so much for sharing these pros and cons. I find it as the useful material for students. So I want to share it on my page to let more students know about these pros and cons.

Apr 28, 2018 12:07 PM #5
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Rainmaker
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Marcy Moyer

Probate, Trust, and Investment Specialist
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