Successful and profitable property management requires you to identify a niche demographic that offers you unique benefits. Did you know that renting to students is one of the largest rental demographics? While the student market is large it is not without drawbacks. However, when done right, renting to students can be a profitable and low-risk venture. This guide explores the pros and cons of renting to particularly college or university students and getting the most out of the experience.
The pros of renting to college/ university students
If you own rental property in close proximity to a college or university then you can consider renting to college students. When considering a student rental application, take into account the benefits and drawbacks of renting to a student. Here are some of the benefits of renting to students.
Owning a rental property in a college town offers the unique benefit of having a unique and consistent demand of tenants. There is always a steady number of students looking for housing and seeking accommodation. Besides this, most students tend to stay in the same living arrangement for the duration of their studies. As such, it will be a few years before you have to start looking for new tenants.
By renting to students you can dramatically lower your marketing and advertising expenses. Marketing your property to college students is as simple as posting some flyers around campus. As long as your property is close to the campus you will most likely have an influx of rental applications. Moreover, most student tenants recommend or pass their lease down to their friends. As such, you will always have tenants for your rental property.
Higher rent payments
Rentals in college towns are generally higher than rentals in other markets. As such, you can expect consistently high income from your tenants. In most cases, rent in college or uni towns is on par with the college or university’s board rate.
Most student renters usually have lower expectations than the average renter. Therefore, you can save on the money you would need to make frequent upgrades in other markets.
The cons of renting to college students
While there are lots of benefits associated with renting to college students, there are also some drawbacks.
For most students, this will be their first rental experience and first time away from home. With this in mind, some student tenants will act irresponsibly. This irresponsibility can manifest in the form of property damage as well as noise complaints.
Reduced tenant screening
Since it will be the first renting experience for most student tenants, they will not have built up a rental or employment history. This makes it extremely difficult to screen and vet student tenants.
High tenant turnover
High tenant turnover comes with the territory when you rent to student tenants. You will most likely experience high tenant turnover during academic years. As such, this impacts your income and revenue stream. However, this can be offset by the higher rent you get when renting to college students.
Minimising the risks of renting to college students
As with any other investment type, it is essential to be proactive when renting to college students to avoid problems later on. Here are some effective ways to minimise risks when renting to college students.
1. Upgrade your lease agreement
To start with, ensure that your lease agreement is specifically designed for college students. Moreover, your lease should cover all the bases when it comes to renting to college students.
Be sure to request a co-signer to the lease to give you peace of mind. Student tenants can be a risky investment, so request surety to mitigate the risk of problems down the line.
3. Maximum occupancy and visitors
Your lease agreement should be explicitly clear on the maximum occupancy limit. Besides this, your lease should also give clarity on the number of guests allowed and the permitted duration of their stay.
4. Damages and repairs
It is also imperative that your lease is clear on who is responsible for damages to the property. Despite your best efforts, student tenants may still cause damage to your property. With this in mind, consider increasing your security deposit to cover any repairs that may be needed.
5. Conduct inspections
Also, you should conduct regular inspections of your rental property so you can stay on top of things. This will allow you to identify and conduct any repairs while issues are still small and less problematic.