Owning a rental property in a college town can have various advantages and disadvantages. Renting to college students can be a very successful strategy if done right. Completing the proper research will help prepare any property owner to make the greatest investment gain. This guide includes various tips, as well as the pros and cons, for renting to college students in order for every property investor to make the best business decisions.
Pros of Renting to College Students
- Demand for housing is high. This is especially true in large college towns. With most schools having limited on-campus housing, there is a higher demand for rental properties. This can create several advantages for property owners including more competitive rent rates, fewer vacancies, and lower expectations from tenants.
- Easy marketing. There are few qualities students look for in a rental property that can bring easy marketing. Things like walkability to essential amenities, proximity to campus, and access to public transportation are usually more important to student tenants. There are also many ways to advertise to students such as housing fairs and being active on social media.
- Large tenant pool. In college towns with a large number of students and high demand for housing, the tenant pool will be large enough to keep a steady business. This will allow you the opportunity to screen all applicants and ensure that your property has reliable student tenants.
Cons of Renting to College Students
- Lack of credit history. Managing a student property means tenants will have a lack of credit. College is often times the first experience these tenants will have living on their own. Without income, credit, or rental history, it can be hard to determine if a tenant will be responsible regarding their rental finances. Though, there are ways around this risk such as requiring a co-signer or proof of finances.
- Increased potential for noise complaints and property damage. It’s not a no-brainer that students and young adults in their 20s like to have fun. Renting to students gives an increased potential for getting noise complaints and property damage. Enforcing quiet time hours can help reduce loud noise after-hours. Requiring students to have insurance will allow any damage they make to the property to be their financial responsibility. Conducting inspections will also give an idea of how student tenants are maintaining the property.
- Typically not long-term tenants. A downside of renting to students is most tenants will only be there for a limited amount of time. Whether students stay for one year or through graduate school, they most likely will not be there forever. This means there is a frequent turnover, but the good thing is there will always be new students in town.
Have a Strong Social Media Presence
Being active on social media is one of the best ways to reach college students. Social media provides the easiest way to market a property and it is a great way to communicate with current and potential tenants. Social media can be used to give students tips for being good tenants and to give updates on things going on around the property. This can also help to understand what students want out of property such as free wifi or on-site laundry.
Screen Every Applicant
Although a large tenant pool is a positive for any property, tenants should also be screened to avoid any negative surprises. Requesting a reference, such as previous landlords or employers if first-time renters can provide an idea of how they’ll be as a student tenant. Applications will also tell you if tenants will be bringing pets, in which case an extra security deposit and other fees might be necessary. To review more on pet-friendly renting, check out A Complete Guide for Pet-Friendly Properties. Regardless of how a tenant screens, be sure to always follow the fair-housing guidelines.
Create Clear Leasing Terms
Establishing a clear set of leasing terms will help to avoid any issues between the landlord and tenants. There are a few things a student lease should include to help run a successful business. Extending the lease term through the summer will help avoid a seasonal income gap and keep a steady income. Requiring students to have a co-signer will also avoid losing income if students can make payments. Many properties also require students to get renter’s insurance with minimum liability coverage to avoid legal fees. Including a section about subletting is also a good idea to ensure that if students want to move out for the summer, they must have their leasing finance covered.
