If you own property near a college campus, renting to college students might seem a little worrying at first. However, there are both advantages and disadvantages to this type of rental agreement.
In this article, we’re going to explore some of the pros and cons of renting to college students, how to go about it, and what you can do to mitigate some of the potential risks.
1. Predictable tenancy – Because college semesters are cyclical, you can generally predict when your tenants will move in and out. This makes it easier to plan for vacancy periods and schedule renovations or other maintenance during times when you know your units will be unoccupied.
2. Longer leases – Most college students are only looking for a place to stay for the academic year, which means you can usually sign them to 9- or 12-month leases. This can provide some stability for your rental income, as opposed to having to constantly re-market and fill vacant units with new tenants every few months.
3. Higher rents – College students are often willing to pay slightly higher rents in exchange for convenience and amenities like being close to campus, having a short commute, or having a furnished unit.
4. Possible reduction in turnover – Because students are usually only looking for a place to stay for the academic year, you’ll typically experience less turnover than if you were renting to tenants with shorter lease terms. This can save you money on re-marketing and make it easier to maintain your rental units since you won’t have to constantly prepare them for new tenants.
5. Easier to screen – College students usually have information like their GPA and SAT scores readily available, which can make tenant screening easier than if you were renting to someone with no rental history or employment verification.
6. High demand – There is often high demand for rental units near college campuses, which can give you more negotiating power when it comes to rental prices and lease terms.
7. Less picky – Students are often more concerned with having a place to sleep and study, and less concerned about fancy upgrades and amenities. This can make it easier to rent out lower-end units that might have a harder time finding tenants if you were targeting other demographics.
8. Parental guarantee – Many students have their parents co-sign the lease or act as a guarantor, which can give you some peace of mind knowing that there is someone else responsible for the rent if the student fails to pay.
1. Damage to property – Because they are often young and inexperienced, college students can be more likely to damage your property. This can include things like leaving food out and attracting pests, causing water damage from overflowing toilets or showers, or damaging furniture or walls when moving in or out.
2. Noise complaints – College students are often up late studying or socializing, which can lead to noise complaints from neighbors. This can be especially problematic if you have multiple units in the same building, as the noise can disturb other tenants and impact their quality of life.
3. Party house reputation – If you rent to a lot of college students, your property could develop a reputation as a “party house.” This can make it difficult to attract other types of tenants, and may even lead to complaints from the neighbors.
4. Difficult to evict – The eviction process can be more difficult with college students, as they may have a shorter lease term and be less familiar with the legalities of the process. Additionally, if the student is under 18 years old, their parents may need to be involved in the eviction process.
5. Possible increase in turnover – Even though students are usually only looking for a place to stay for the academic year, there is still a possibility that they will decide to move off-campus or transfer to another school. This can lead to an increase in turnover, and you may have to constantly re-market and fill vacant units.
6. Might need special permission – In some states, you may need to get special permission from the school or the city in order to rent to college students. This can add an extra layer of bureaucracy to the process, and may even limit the number of units you can rent out.
7. Can be difficult to find – College students are often transient and may not have a lot of money for a security deposit or first month’s rent. This can make it difficult to find qualified tenants, and you may have to be more flexible with your lease terms and rental prices.
8. May need extra insurance – If you’re renting to college students, you may need to get additional insurance to cover any damage that they may cause to your property. This can add an extra expense to your budget, and may even impact your bottom line.
How to Minimize the Risks of Renting to College Students
There are a few things you can do to minimize the risks of renting to college students:
1. Carefully screen tenants – When you’re screening tenants, especially roommates, be sure to check their rental history and employment verification. You may also want to require a guarantor or co-signer on the lease.
2. Be clear about expectations – Be sure to set clear expectations with your tenants about noise levels, guest policy, and common areas. It’s also important to have a strict late payment policy in place.
3. Inspect the unit regularly – Inspect the unit regularly to look for any damage that may have been caused by the tenants. This will help you identify any problems early on and avoid any costly repairs down the road.
4. Have a written lease – Having a written lease is important, as it will help you enforce your rules and regulations. Be sure to include a clause that allows you to terminate the lease if the tenants violate the terms.
5. Consider short-term leases – If you’re worried about turnover, you may want to consider offering short-term leases. This will allow you to re-market the unit more frequently and avoid having vacant units for long periods of time.
6. Get extra insurance – As we mentioned earlier, you may want to get additional insurance to cover any damage that the tenants may cause. This will help protect your investment and ensure that you’re not out of pocket for any repairs.
7. Hire a property manager – If you’re worried about the hassle of renting to college students, you may want to hire a property manager. They can handle the screening, leasing, and day-to-day management of the property, which will take a lot of the stress off of you.
8. Consider renting to grad students – If you’re really worried about the risks of renting to college students, you may want to consider renting to graduate students. They are usually older and more responsible, and they typically stay in one place for longer periods of time.
9. Know your rights – Finally, it’s important to know your rights as a landlord. This will help you protect yourself from any legal issues that may arise. Be sure to consult with an attorney if you have any questions or concerns.
Renting to college students can be a great way to earn extra income, but it’s important to be aware of the risks involved. By following the tips above, you can minimize the risks and maximize your chances of having a successful rental experience.
What College Students Look for in a Rental
Understanding what college students look for in a rental can help you decide how to market, price, and stage your unit. College students typically want a few key things in a rental:
1. Location – College students want to be close to campus, as they don’t want to waste time commuting. They also want to be close to nightlife and restaurants.
2. Price – College students are on a tight budget, so they’re looking for an affordable place to live. They’re also likely to be looking for roommates to split the cost of the rent.
3. Amenities – College students want a unit that has all the amenities they need, such as free wi-fi, access to a washer and dryer, dishwasher, and air conditioning. They also want a spacious unit with plenty of storage.
4. Safety – College students want to feel safe in their rental, so they’re looking for a unit that’s in a safe neighborhood. They also want a unit that has security features, such as a deadbolt lock and an alarm system.
5. Flexibility – College students often have flexible work and school schedules, so they’re looking for a unit with a flexible lease. They may also want to be able to sublet the unit if they need to leave town for an internship or study abroad program.
By keeping these things in mind, you can make your unit more appealing to college students and increase your chances of renting it out.
Maximizing Your Investment ROI
Now that you have a better understanding of the pros and cons of renting to college students, as well as what they are looking for in a rental, you may be considering expanding your investment portfolio to include student housing. If so, there are a few things you need to do to maximize your ROI:
1. Do your research – Before you buy an investment property, it’s important to do your research and understand the market. You need to know what type of property is in demand, where the best location for it is, and how much you can expect to earn.
2. Get a good deal – It’s important to get a good deal on your investment property. This will help you maximize your ROI and make a profit down the road. Be sure to work with an experienced real estate agent who can help you find the best deals.
3. Make improvements – Once you’ve purchased your investment property, it’s important to make improvements to it. This will help you attract tenants and keep them happy. Some improvements you may want to consider include painting the walls, updating the appliances, and adding security features.
4. Stay organized – Finally, it’s important to stay organized when you’re renting to college students. This means keeping track of your finances, maintaining the property, and dealing with any issues that may arise. By staying organized, you can keep your stress levels down and make the most of your investment.
The Bottom Line
Investing in college town properties and renting to college students can be an excellent way to boost your portfolio. But, as with any investment property, it has its benefits and drawbacks. It’s important to do your research, understand the market, and be prepared for the challenges that come with renting to college students. With a little effort, you can make your student rental property a success.
If you’re ready to expand your portfolio, it will help to speak with a local real estate agent that understands college town investments. They will be able to provide you with more information about the market and help you find the perfect property for your needs.
With FastExpert, you can browse through a list of top-rated agents in your area and find the one that’s right for you. Simply enter your ZIP code, and we’ll match you with agents in your area so you can find one that specializes in college town investments. We’ll also provide you with their contact information, so you can get started right away. So, what are you waiting for?