Occupancy and Zoning

 In Utah County, cities typically restrict occupancy to one couple, or three unrelated singles per unit.

For example, with a legal duplex, you can put up to 6 singles, 3 per  unit, or two couples total.   However, there are several condo complexes  just south of campus (on condo row between 700 N and BYU) and some  newer complexes (like the University Ave complex , and the Lanai), that  allow 4 singles per unit.   The only complex that I know of that allows 6  students, is the Brownstone.

Obviously, the higher the occupancy the better the cash flow.  These  days, the occupancy on a unit has to conform to the original zoning  regulations and cannot be changed.  Unlike the past, complexes with a  higher occupancy that have been built recently have had to provide off  street parking for every occupant.

In the past, I’ve sold several single-family homes near campus that  were zoned with a higher occupancy, and had an occupancy of 6 per  unit.   The problem with the higher occupancy units is that the students  have to share a room, which isn’t as popular as when I was a broke Cougar, years ago!

The best way to confirm occupancy and zoning is to have your agent  (hopefully myself), make any offer contingent on your approval of a  zoning verification.  You can get a zoning verification at city offices  for $20. It will tell you the property’s current use and occupancy  restrictions.

During the spring/summer months,  higher occupancy units are harder  to fill, because you can find private rooms during spring/summer for as  little as $150 a month per student.  You’ll typically find that there is  a $100 drop in rental prices during the Spring/Summer terms on most  student rentals.

 While selling property near BYU the last several years, I have noticed  that BYU approved properties have generally seen better appreciation  than properties that haven’t been BYU approved. I also like to find  investments within the undergrad boundary, not only because of proximity  to BYU, but because they’ve also seen better appreciation historically. 

A two bed one bath apartment near  campus generally rents to couples for around $600-$650 a month.  Three  bedroom units rent from $700-$800 depending on location and size.

Singles are nice, because although they usually take a break  spring/summer, they generally pay more during the eight fall/winter  months than the couples do. There seems to be a shift to year round  contracts right now, making it the student’s responsibility to find a  replacement if he/she decides to head home for the summer.

Singles must live in BYU approved properties. Most live in apartments  or condos near campus. Singles also seem to be a little harder on  things than married folks.

Investment note: BYU approved condos near campus  have appreciated very nicely in the past. It seems the closer the condo  is to BYU, the easier it is to rent. 

Single rooms vary in income from  $260-$450 for a private room, to $230-$260 for a shared room  fall/winter, depending on the project and its proximity to campus. Rents  drop around $100 per student Spring/Summer.