Thinking of Leasing to Students?
The Pros and Cons of College Rentals
If you own rental property in a college town, it’s up to you whether or not you choose to lease to students. Knowing what to expect can be very helpful!
Here are some considerations if you own or are thinking about purchasing rental property in a college town.
The Pros:
- You have a captive audience. Students have to live somewhere, and most of them will be around for four years, giving you a large pool of applicants to choose from.
- Student housing is often in short supply. Depending on your location, there could be great demand for your property.
- Not all students are poor. Many parents foot the entire bill for their kids’ college, including housing. If your tenants’ parents have deep pockets, the rent should be paid on time every month. Put the parents on the lease as co-signers.
- Not all students are partiers. Many actually like quiet. If you’d rather rent to the studious types, you can—just do your due diligence and screen carefully.
The Cons:
- Many students are messy. It doesn’t matter if they’re boys or girls—mature or not. Younger people often put cleaning their apartments or homes at the bottom of their to-do lists, especially if they are busy with school, work, and studying.
- Students often have parties. However, you do not have to allow loud parties on your property.
- Students might not care for your property as well as older people and families would. But you might be surprised. Some landlords report fewer problems with damaged property from students than from other categories of tenants.
- Students might not inform you of plumbing, electrical, or other structural issues immediately. Keep the lines of communication open, inspect your property often, and never assume your younger tenants will take the initiative to inform you of problems.
- Summer means vacancies. Assume ten months of rent when considering your profit/loss, and if you can rent over the summer, it’s a bonus.
Renting to students is not much different from other tenants— your tenants will treat you and your property exactly as you allow them to. Proper screening, move-in / move-out procedures, and complete documentation are musts. And remember to always let your tenants know the rules, along with the consequences for breaking them, right up front. It’s up to you to set the expectations from the very beginning.