Landlord’s Guide to Renting To College Students

If your property is close to a university campus, then renting to students can be incredibly lucrative. However, renting property to college students comes with its own hurdles, and you’ll need to decide whether you want to be a part of it or not. Let’s try to understand the legalities, risks, and advantages of renting to college students.

Can you refuse to rent your unit to college students?

To put things into perspective, you can’t refuse student rentals based on arbitrary criteria. The Fair Housing Act prohibits age-based discrimination, and since most students fall under the 16-25 age bracket, refusing a home due to their age is considered discrimination. If you don’t want to rent to students, you’ll need to give a detailed explanation on the reasons, which can only be along the lines of: 

1. Low credit score 
2. Insufficient income 
3. Legal reasons  

Benefits of Renting to College Students

Every year, millions of students enter universities and look for rental apartments. They are a goldmine to real estate investors who want to capitalize on income opportunities. Along with bringing in consistent revenue, renting to college students offers immense benefits for investors. Read on to find out why renting to college students can be a smart strategy for any investor:

1. In-Demand Off-Campus Housing 

Those fortunate enough to own rental property within proximity to a college campus are aware of the demand. Students prefer to stay as close as possible to their college when living in off-campus housing. During the academic year, rental demand may see small fluctuations, but this demographic comes in with a built-in demand that makes investing in college town properties lucrative for investors. It is also easier to keep the properties rented for years based solely on resident referrals or via word of mouth.

2. Yield Higher Rent 

The real estate industry is highly dependent upon supply and demand mechanisms. A desirable property is more likely to cost more. The same holds true for rent: the more desirable the property’s location, the more it can demand in the form of rent.

Location is king in college communities amongst students. Students are forced to choose among properties located within a certain radius. The closer a rental property is to campus, the more students will want to call it home. This perceived value permits landowners to charge more rent than those two or even just one block further away.

3. Resident’s Expectations

Many students have never lived independently before, or if they have, it has been in a college dormitory.  They don’t expect a rental property to be the most modern, updated, or beautifully landscaped. For instance, the paint or flooring doesn’t matter as much to a student as it might to a more established professional or family. 

Instead of high-quality amenities, students are more concerned about basic amenities. This is great news for investors who wish to avoid property upgrades. Even if the property is not home to the latest features, it will still stay in demand.

Risks of Renting to College Students

We believe that renting to students brings an excellent opportunity, however, you should plan to be able to mitigate the potential risks of the market. This will minimize risk and help you to prepare for the worst.

Here are the potential risks associated with renting to students:

• Increased risk of damage
• High turnover between academic years
• Reliability issues when working with first-time renters
• Cost of time and funds to enforce additional rules and regulations

Steps to Minimize Risk When Renting To College Students

When considering renting to college students, be sure to strategize before doing so. Here are several steps you can take to protect your investment property. 

1. Ensure you have an application process for residents. Students may not have a credit history. You can ask for other housing references or proof of income.
2. To minimize risk, work with an attorney to have a lease created for college students. This could include procedures in case of property damage, failure to pay rent, or occupancy violations.
3. Set up essential clauses in your rental agreement specifying utility usage, common area use, smoking guidelines, pet guidelines, and other guidelines. 

Must-Haves For Students

College students do have some key wants and needs. Here are a few must-haves to attract college students:

• Distance: Proximity to campus is the most important factor when renting to college students. Not every student owns a means of transportation, so a property must be within a reasonable distance.  Also, proximity to grocery stores and essentials is a definite plus for a student rental.
• In-house Laundry: Having an in-house laundry unit is a heavily desired feature for college rentals so they don’t have to visit a laundromat. 
• WiFi:  From research to turning in assignments, college students spend endless hours on the internet. Offering complimentary WiFi in your college rental is certainly an amenity students will be searching for. 

If you own a rental property near a college campus and/or you’re interested in renting your property to college students, we recommend hiring a qualified property manager. 

Choose Beach Front Property Management

With years of experience in specialty markets like college and university towns, Beach Front Property Management can help you maximize your returns and minimize your stress. Our professional property managers will review your rental policies and ensure you are not accidentally discriminating or unlawfully denying tenancy. They will also help you navigate the leasing process, maintenance, and day-to-day needs of your property and residents.