Is a rental house near Gonzaga worth buying, and what should you plan for?

Gonzaga sits on the north bank of the Spokane River in the Logan neighborhood, east of Division Street. Hamilton Street is the neighborhood’s main commercial strip, with the coffee, pizza and groceries students actually walk to, and the Centennial Trail follows the river along the south edge of campus. Spokane Transit’s City Line runs through the area toward downtown.

Students who move off campus mostly want to walk or bike to class. That pulls rental demand into the blocks closest to campus, along streets like Sharp and Boone avenues, and it thins as you move north and east toward the edges of the neighborhood. Distance to campus is the first thing a student group asks about, and it is the first thing to check on any listing.

The houses are mostly early twentieth century wood-frame two-stories with deep front porches, many of them rented to students for decades. Over that time a lot of them picked up extra bedrooms in attics and basements. Some of those rooms were built with permits and proper exits. Others were not, and a listing’s bedroom count will not tell you which is which.

A student rental runs on the academic year. Groups of friends usually decide where they will live next year well before the current one ends, and a house that is not lined up by then can sit longer than you expect. If you are buying a house that will be empty at closing, the timing of the purchase matters almost as much as the price.

Summer is the gap every owner has to plan around. A lease that covers only the school year leaves the house empty for the summer months. A twelve-month lease that allows subletting shifts the job of filling the summer onto the tenants, which suits some groups and not others. Underwrite whichever one you plan to use, and never assume twelve full months of rent from a house that students will leave in May.

Winter break deserves its own line in the lease. An empty old house in a Spokane December is how pipes freeze. Set a minimum thermostat setting in the lease, ask tenants to tell you when everyone will be gone, and have someone walk through the house during the break.

Student houses are usually rented on one lease that every roommate signs, with each person responsible for the whole rent, and a parent or another adult signing as a guarantor. That structure protects you when one roommate leaves midyear. It only works if the paperwork is clean and the screening is consistent.

Before screening, Washington requires landlords to tell applicants in writing, or by posting, what information they will check and what criteria can lead to a denial, and a screening charge cannot exceed the customary cost of a screening service in the area. Apply the same written standard to every applicant and every guarantor. Fair housing law applies near a campus exactly as it does anywhere else. You can describe a house as close to Gonzaga, but you cannot turn away a family with children who want to rent it, and in Washington a tenant’s lawful source of income is protected as well. Write your ads about the property and let the criteria do the screening.

The state’s rent increase law applies to student leases too. A landlord cannot raise the rent during the first twelve months of a tenancy, increases after that are capped at a figure the Department of Commerce publishes each year, and the notice period is 90 days statewide. The law lets you set a new rent once a tenant moves out and the tenancy ends. With student groups, where two roommates stay and two new ones join, whether that is a new tenancy is a question for a Washington landlord-tenant attorney. Can you raise the rent after buying a rental in Washington covers the cap in more detail.

Expect turnover most years. That means paint, cleaning, rekeying and a round of small repairs almost every summer, on a much shorter cycle than a house rented to one household for a long stretch. Durable finishes make sense here: plank flooring over carpet in the common rooms, washable paint, solid door hardware and plain fixtures that are easy to replace.

The house underneath the finishes matters more. On an older Logan house, the inspection period is the time to look closely at these:

• The side sewer, with a camera scope. Old clay and cast iron lines and mature street trees do not mix well.
• The electrical system, especially any remaining knob-and-tube wiring, which can limit your insurance options.
• The heating system, and whether an old heating oil tank was ever removed or decommissioned.
• The roof and gutters, which carry real snow in a Spokane winter.
• The porch, its posts and railings. Deep porches get heavy use in a student house.

Snow is also a lease question. Spokane expects sidewalks cleared after a snowfall, and on a corner lot that is two sidewalks. Decide in writing who shovels and what happens when nobody does.

Call the City of Spokane before your contingencies end. The city requires a business license with a City of Spokane endorsement and yearly registration in its long-term rental registry, and how Spokane’s program compares with Tacoma, Kent and the Tri-Cities is covered separately.

Count only legal bedrooms. A basement bedroom needs a proper egress window, and an attic room needs a safe way out. On occupancy, Washington law bars cities from limiting the number of unrelated people who share a household, though occupancy limits based on floor area and general health and safety codes still apply. Ask the city how those standards apply to the specific house.

Look at parking the way a tenant will. Street parking near campus fills during the school year and on basketball nights at the McCarthey Athletic Center, so a driveway or alley parking pad is a real feature. If you are thinking about adding a unit or converting the house, zoning and permitting are the city’s call, and the answer depends on the lot.

From Tacoma, Seattle or the Eastside, the drive over Snoqualmie Pass on I-90 is long, and in winter it is not a trip you make for a clogged drain. Plan on a Spokane property manager with student housing experience. Ask how they handle group applications and guarantors, move-out inspections, the summer gap and winter break checks.

If your own student will live in the house, tell your lender exactly who will occupy it. Occupancy statements on a loan application carry weight, and the loan options for an investment property and a second home differ. How rent from your student’s roommates is taxed is a question for your CPA.

Bedroom count makes student houses look strong on quick screens, and a Logan house can pass the 1% rule and still lose money. A careful analysis starts from whole-house rent based on comparable leases near campus. Then it takes out a vacancy allowance that reflects the summer gap, a larger repair and turnover budget, management, the license, and any utilities you plan to include, since student groups often ask for them bundled into the rent.

Spokane’s other rental neighborhoods, from Browne’s Addition to the South Hill, are described on the markets page. Compare a Logan house against a plain single-family rental a few miles away before you commit to the student market.

This is general information for buyers. Confirm licensing, occupancy and code questions with the City of Spokane, lease and fair housing questions with a Washington landlord-tenant attorney, and tax questions with a CPA.