Since moving to our area last year, Mr. D and I have been discussing buying a house in a nearby (small) university town. The town is 15 minutes from where we live so we would manage it ourselves. I have been watching 2 houses, but 1 in particular, I like better than the other (the other doesn't seem well kept).

House: $215,000 (4bed, 2ba, 1400 sqft) In looking at other properties in the neighborhood this house looks overpriced by almost $20k

Downpayment: We have 20% saved currently, but would prefer to put less down if possible.

2015 property taxes: $3100

By my calculations the mortgage would be $1200/month

The current owner typically rents to 4-5 college students a semester at $3200/semester/student and the property looks well kept:

new furnace, oil tank, hot water heater, electric wiring. Newer Windows.

In the summers they rent each room $125/week

If the house rents to 4 college students each semester at $3200/semester/student

That should bring in $25,600/year ($2133/month)

10% for vacancy: $213

10% for repairs: $213

That breaks out to $1707/month (Not counting summer weekly rentals)

Leaving us with a profit of $507/month after mortgage is paid.

Is the math right? Do you think it makes sense to buy this property? What are the pros and cons to this house but also renting to college students?

Thanks!

Mrs. D.