Are you considering renting to students?
If you own a rental property near a college or university campus, renting to students can be a great way to keep your property vacancy-free. However, it's important that your advertising methods and overall property attract students in the first place. Once you identity paticular needs they look for in a living space, you can quickly attract student renters.
In this article, we'll list the major pros and cons of renting to students. You'll learn about the benefits and risks of designating your rental property as a student pad.
The Pros of Renting to Students
1. Command a Slightly Higher Rent
Students often have roommates. For this reason, you may be able to command higher rent.
For example, lets say you are renting out a two bedroom apartment. Two students will likely be willing to pay more for the unit, as they will be splitting the cost of rent.
2. Save Money on Upgrades
You won't have to worry about upgrades as you would in a typical residential property setting. Since student tenants are not typically long-term renters, it's highly unlikely that they would be looking for anything fancy.
You won't have to invest anything in costly upgrades like granite kitchen countertops or natural stone kitchen backsplashes. The down-to-earth expectations of students work in your favor.
3. Know Exactly What They Want
Students have simple wants and needs when it comes to finding a rental. However, there are certain aspects of a rental that make it more likely to rent to students.
These are the top things students look for in a property:
- Public Transportation - Your rental property should have quick access to public transportation. Many students don't have a car yet.
- Private Space - Even if students live with their roommates, they will still want to a space for themselves. At least some privacy is essential.
- Distance from Campus - This may be the top deciding factor for many students. The closer the proximity of the property to the college campus, the better.
- Laundry - Students prefer on-site laundry solutions. Laundry machines can also be coin-operated, providing you with an additional source of income from your property.
The Cons of Renting to Students
1. High Turnover Rate
Student tenancies are shorter than average. As a landlord, you'll find it hard to hang onto student tenants for more than a year. Most students come and go regularly.
Even though a degree may take students up to four years to complete, it's unlikely that they are going to stay in the same place for that long. For instance, they may find a better deal, have unresolved conflicts between each other as roommates or go on an exchange year abroad.
The key here is to make the best of these circumstances. It's good practice to ask for a year-long lease. In this case, you can be sure that your cash flow won't stop suddenly.
2. Late Payments
While you can charge a higher rental rate for a group of student roomates, you may have to deal with late payments from them too. As individuals becoming newly independent, they may not yet have the sense of responsibility to pay their rent on time.
You can lower the risk of late payments by asking for a parent co-signer. You may find that parents are willing to directly pay for their child's rent. This will diminish the risk of having to deal with delays.
3. Property Damage
It's no secret that student housing experiences more wear and tear compared to other types of rental properties on the market. This is something that you need to budget accordingly. Otherwise, you may face bigger expenses down the line.
A common issue is that students tend to forget to report a repair need at the appropriate time. This will cause smaller issues to inevitably grow into bigger problems in the long run.
The best approach is to explain to your tenants about repair needs and reporting right from the beginning. Make it known that they should always report even the most minor of issues.
Final Thoughts: Things to Do When Renting to Students
- Conduct Inspections - When you have students living in your rental property, it's important to conduct proper move-in and move-out inspections. Periodic check-ups are crucial as well.
- Screen the Roommates - Make sure that you know who is sharing the property. Check the background of anyone who is residing in your rental. Ensure that these students have signed a lease.
In a Nutshell: Renting to Students
There are many pros and cons of renting to students that you must take into account. However, it can be a great strategy overall. If you have a simple rental property located close to the campus, it could be a desirable choice for many students.