Wanna Build a Dorm?

[PEERless]

I did some cursory research, and I can't find much info about residential dormitories outside of applications like educational, corporate, military, etc. It seems to me that this ultra-high density housing could have applications in some markets. It's such an obvious solution that there must be some reason it's not being done (or that I'm not seeing it).

Zoning? Building codes?

If there is no good reason it's not being done, then I have a model in mind for my local market that would gush cash.

 

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[bflbob]

My guess is that zoning would be the biggest hurdle.

When our company is in the early phases of development of a Senior Living or Affordable Senior Housing project, that's our biggest problem. Big gatherings with the locals, who all claim the Seniors will be peeing on their lawns, drag racing down the streets, and wandering through their homes, taking what they want. News 10 Now | 24 Hour Local News | TOP STORIES | Senior housing complexes popping up in Broome County

If these are the concerns surrounding a bunch of senior citizens living on Social Security, can you imagine their concerns with a bunch of younger singles renting rooms? Drugs, drunks, loud parties, streaking, etc.

The battle to get these places approved are tough and very long. It takes deep pockets, lots of attorneys, and years of patience to get approval for these types of projects.

Where I think they might work is in the blighted areas of a city, more downtown than the suburbs (where we tend to build). If you were to tear down a bunch of outdated housing in a run-down section of the city, and replace it with an upscale dorm-style complex, it might work.

The neighbors wouldn't be likely to fight it, since most properties are rentals, not owner-occupants. And for the REI's in the area, your building would likely increase the value of their properties, so they wouldn't fight the project.

The bigger qestion in this case would be...if you build it, will they come? It might be tough getting tenants to come to what was formerly known as the worst part of the city.

 

[yveskleinsky]

upscale dorm-style complex

Isn't this a contradiction in terms? ...To me, anything upscale would at a minimum have it's own kitchen and bathroom . I can't imagine sharing with 10+ strangers. ...Although it might make for a good reality show. Ack! I'm having flash backs to college. Dirty dishes in the sink, hair in the drain, roommate using all my conditioner .

 

[bflbob]

Gotta agree. But with the right tenants, and a cleaning service to maintain the common areas, anything is possible.

Although I've never been there, my understanding is that this type of setup might be more common in Japan, where space is quite limited. But, with the changes in the US economy, you might soon find it easier to rent out a dorm-style room for $300/month than a house or apartment for triple that amount.

Upscale, at least in my area, usually means "built after WWII". New construction, especially in the old part of town, would definately be looked upon as upscale. Adding wireless, up-to-date electrical and cable, and modern convieniences, and security, would be a strong renting-point in out area. The duplex I was making an offer on was built in the late 1800's.

 

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[PEERless]

To me, anything upscale would at a minimum have it's own kitchen and bathroom.

Well, we're not appealing to upscale, here. To clarify, I live in a resort town with median home prices @ $1.8M and median rents @ $1,500/mo. During summer and winter there are LARGE influxes of young short-term residents from all over the world. 1-year leases in nice condos are pretty unappealing to these types.

My guess is that zoning would be the biggest hurdle...Drugs, drunks, loud parties, streaking, etc... But with the right tenants, and a cleaning service to maintain the common areas, anything is possible.

Zoning may well be impossible here. "NIMBY" is practically the town slogan, and affordable-housing neighborhoods are crushed in the planning phase by legal heavyweights.

Still, maybe I'll file this idea for later. The town is at or near capacity. It cannot expand, because of national park land on every boundary. Smart infill will have to happen someday. And I think dorms would be really appealing to a certain demographic. And profitable and repeatable!

 

[hatterasguy]

The nimby's would kill you and their is no money in it. Why pay $500k for dirt and rent it to bums when you can pay $500k for dirt and rent it to people with money? Building costs only very so much, the dirt is what gets you.

You should see how hard the neighbors fight some of the little condo projects we are doing. One is 6 units on a pretty main street with other larger condo's down the road. 6 freaken units and they are screaming! Oh they get pissed because its "low income". Low income in my area is a $300k unit! :coco:

 

[PEERless]

I understand your thoughts, except this one:

Why pay $500k for dirt and rent it to bums when you can pay $500k for dirt and rent it to people with money?

I could get a high volume of low rents. Imagine a 50-room dorm earning $300-500/unit/month. Imagine doing it again and again in similar markets all over the country. All over the world?

The economy could well reshape the way a lot of things are done. Especially if NIMBYs get foreclosed from their own BYs.

 

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[hatterasguy]

If you can get zoning approval for it. Having fought zoning battles for condo's you have your work cut out for you. Every town and city is different, but zoning changes are hard. It could take 10 years to get it changed, and some good legal fee's.

Just the parking alone would kill you. You would probably make more money making slightly fewer units and renting them for $1k a month.

 

[PEERless]

Well, I was looking at low-cost, high-volume. My first REI property sits in the upper end of local comps, and I feel like I have a needier clientèle. A wealthy friend of mine said, if he could do it all again, he'd go into pizza earlier. Low costs, high mark-ups, high volume. I thought maybe dorms would be a good way to apply that model to REI. >thinking aloud<

 

[PEERless]

LOL! SOMEONE IS DOING IT! I saw in the paper that the housing commission just OKed the conversion of an old motel into cheap short-term employee housing! I knew there was a need, but another investor (actually the guy who funded my xGF's coffee shop) was ahead of me. Good for him.

 

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[Bradley Shelle]

The list of advice and suggestions is really long. But you are a high school graduate. You should utilize your high school experience to face challenges at your university.

If you don't want roll your sleeves, you're better off living in an independent apartment outside your university campus.

 

[PEERless]

The list of advice and suggestions is really long. But you are a high school graduate. You should utilize your high school experience to face challenges at your university.

If you don't want roll your sleeves, you're better off living in an independent apartment outside your university campus.

Wait, WHAT!? WTF are you talking about.

Edit: Oh, banned. Good.

 

[Russ H]

Yeah, for only posting enough to pimp his sig, he sure made some wacky comments. :coco:

-Russ H.

 

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[PEERless]

It seems the NIMBYs had no problem with turning an old motel into housing. See Days Inn Change Endorsed.