If a residential property is in what is called a “college town”, renting it to students may be the most lucrative way to profit from your rental business. Most property owners are wary of renting to students for their notoriety in being irresponsible and noisy. However, you may be surprised to learn that it is not so. Most students only look for a safe and comfortable place to stay close to their university, complete their courses with good grades, being mindful of their growing debt.
Here are some pros and cons of renting to students to help you weigh your options.
5 Pros of student rentals
Increased bottom-line: Renting to students typically means you can rent by the room, thereby increasing your income from the property. Most students are from out of town and are learning to live on their own for the first time in their lives, so they are willing to pay a little extra for good accommodation. International students often come from well-to-do families and are on the lookout for amenities and location rather than ways to cut down on rental expenses.
No “personalizations” to property: This is a point of relief for landlords. Students are not particular about making the property theirs by making alterations or personal touches. Besides adding a few posters and the occasional nail on the wall, they may not be concerned about how their living space looks.
Ever present demand: Property owners can be assured that as long as universities remain open, there is a steady influx of students year-in and year-out. Most universities do not offer students housing for the entire course period or simply do not have enough rooms for all of their students and are often quite expensive. So, even students to initially opt for on-campus housing eventually move out to neighborhoods nearby.
Easy advertisement: Most student rentals do not need a lot of spending in terms of advertisement, as your tenants will do it for you, by referring new students to your property when they move out or if they are in need of a roommate. Some universities have a system for local student rentals to register with them so they can recommend vacant apartments to their students ensuring little to no vacancy period during tenant turnover.
Fewer upgrades: Most students are not looking for state-of-the art or expensive furnishings in their apartments and are satisfied with simple inhabitable places. If you are mindful of some amenities students may need, like a well-equipped kitchen with additions like toasters, microwaves and kettles or bright and private study-spaces, they may not even care about faded walls or chipped flooring.
5 Cons of student rentals
High turnover: Be prepared for tenants moving in and out every few months as students are ready to move in search of cheaper apartments, to be closer to their part-time jobs or even when they find that their friends are in need of roommates. They may only be willing to sign a lease for about 8 months at a time, the typical length of a course year. So you may find yourself receiving new applications and referrals more than once a year.
Limited ways for screening: As most students are just starting out on their own, there may be very limited resources for screening and verifying their rental or credit history. Most students may need their parents to cosign the agreement, while international students make a deal to pay a few months’ rent ahead to gain your trust.
Contract violation: You may often find your student tenants in violation of the terms of your rental agreement, like not respecting smoking rules or keeping the noise levels in check. Some more serious offences include bringing over friends to stay with them leading to overcrowding, subletting their room over the summer without your knowledge etc leading to more wear and tear or damages to the property.
More damages to property: There always tend to be a few irresponsible tenants to flout rules and neglect upkeep of the apartment. Some may throw frequent parties inviting complaints from neighbors or may damage appliances and light fixtures. However, this is not very different from having bad tenants in any rental situation.
So, managing a student rental is no mean feat. It demands a lot of time, attention and energy, and a lot more than luck to find the best student tenants. However, when you are a proactive landlord, know the rental law, set due process in place and have the right technology to help you manage your properties, owning and managing student rentals can be a positive and profitable experience.
Learn more: Attract, screen and onboard tenants easily