Renting to students introduces several challenges that don’t typically come with renting to other tenants. Before you completely shun the idea, though, student renters do pose a handful of benefits.
The Benefits of Renting to Students
Tenants come in all shapes and sizes, but they are mostly the same in terms of the trials they present. College students, though, are an entire subcategory of their own. You might have heard about the headaches that come with renting to students, and those definitely have a basis. However, student tenants also offer several advantages, such as:
1. Fewer Vacancies
There is a high demand for rental properties among college students, especially those located in and around campuses. Each school year also sees countless new students entering college and finding nearby housing. This steady stream of tenants means you can look forward to a higher occupancy rate.
2. Location Benefits
Properties located in close proximity to colleges and universities have the added benefit of not spending too much on advertising. While a typical landlord might need to put up a lot of ads online just to get tenanted, those who own properties near schools usually only need to work half as hard. Additionally, if your property is surrounded by hot spots like bars and shops, you won’t have much trouble landing interested tenants.
3. Higher Rent
Just because you’re renting to students doesn’t mean you can’t charge a higher price. In fact, properties near college campuses tend to command higher rent than their counterparts. Of course, this doesn’t give you an excuse to charge sky-high prices. When determining rent price, you also need to consider a host of other factors, such as the price of rent for similar properties in your area.
4. No Upgrades Necessary
Because students tend to not have large budgets for housing, they usually look for more affordable options. This means you can get away with renting an apartment that doesn’t have a lot of amenities or upgrades. While other tenants might not want to rent an apartment with half a kitchen and no washer/dryer, students are less picky.
Keep in mind, though, that you still need to maintain the property and perform routine upkeep. You just don’t need to add upgrades like a nice kitchen backsplash, hardwood floors, or a bathtub.
The Disadvantages of Renting to Students
On the other hand, there are also drawbacks to renting rooms to college students. These include the following:
1. First-Time Renters
For students, it is usually their first time renting a place on their own. As such, they practically have nothing to show for it. They have no credit history, employment history, or rental history. You also can’t talk to past landlords or employers. All of these will make it significantly harder for you to screen them.
2. High Turnover Rate
All college students eventually graduate and move on to pursue careers. Usually, that also means moving away from the local vicinity. As such, you should expect tenants to come and go every four years or so.
Additionally, not all student tenants will renew their lease every year. Their housing situations are subject to change. They might suddenly move into on-campus housing or move in with a roommate somewhere else.
3. Property Damage More Likely
Most students don’t have prior experience when it comes to maintenance. As a result, they are more likely to leave the apartment in poor condition. In addition to ignoring or neglecting maintenance problems, students also like to throw parties. And, as most landlords know, college parties can be very damaging to a property.
4. Vacant During Summer
A big downside when renting to students is that tenancies are seasonal. The school year doesn’t last all year round and, come the summer months, your apartment will probably be vacant. A good way to avoid this problem, though, is to only agree to sign full-year leases. That means the tenant will still need to pay rent for the summer months even if they won’t be living there.
Can Landlords Deny Student Renters?
Considering the disadvantages of renting to students, some landlords might wonder whether it is possible to refuse them. The short answer, though, is no. Legally, landlords can’t pick and choose renters based on their age or any other arbitrary attribute.
Denying students simply based on the fact that they are students is a violation of the Fair Housing Act and certain state-level fair housing laws. As such, landlords should open their rental houses for college students to rent in addition to all other types of tenants.
Renting to Students Tips
First-time landlords might be dreading the idea of renting rooms to students. To help you out, here are some tips to make the job much easier to manage.
1. Accept Cosigners/Guarantors
Because most students don’t have rental or credit histories, you can accept consigners or guarantors to ensure rent is paid and damages are covered. Typically, their parents or other relatives will cosign the lease with them. Having a responsible adult cosign the lease may also encourage student tenants to be responsible with the property as well.
2. Require a Security Deposit
It is not uncommon for landlords to charge a security deposit. But, security deposits are made even more integral when renting to students. In addition to a security deposit, you might also consider charging a move-in fee. This fee will cover turnover costs such as cleaning, painting, and other restorations in between tenants.
3. Allow Roommates
Students don’t usually have high incomes, so it is normal for them to want to share rent with other students. While some landlords might feel apprehensive about renting to multiple people (since there are more tenants to manage), allowing roommates is a good way to attract student renters and make sure rent is paid.
Another option is to rent by the bedroom. This type of lease essentially breaks up an apartment into separate leases, renting on a per bedroom basis. Each student is responsible for their own bedroom, while everyone shares responsibility for common areas such as the kitchen and living room. With this type of lease, only the student or roommate who causes damage or doesn’t pay rent suffers the consequences.
4. Require Student Renters Insurance
Landlords have landlord insurance, so it makes sense for student tenants to have renters insurance, too. Requiring renters insurance, even for students, helps protect the tenant’s belongings in case of theft, certain natural disasters, and some cases of water damage. Renters insurance also typically covers injuries that occur on the leased property.
5. Inspect Frequently
Since students are more likely to cause property damage, you should schedule routine inspections more often. Frequent inspections will help you identify any maintenance issues early on. Then, you can address them before they turn into larger problems.
Make sure to always provide notice to your tenant, though, before you conduct the inspection. This is so you can avoid violating their right to privacy and quiet enjoyment.
House Rules for Renting to College Students
On top of all the tips provided above, it is also a good idea to work out some rules you want tenants to follow. Then, you should put those rules in writing by including them in the lease agreement. Here are some of the most common rules landlords enforce when renting to students:
- Late Rent Fee. When a student tenant misses the deadline on their rent, you can charge a late fee (either a set dollar amount or a percentage of the rent due).
- Quiet Hours. Student renters are known for being noisy, so it is smart to impose quiet hours to limit noise complaints.
- Pet Policies. While not all students have time for pets, some actively look for apartments that allow them. As such, it’s important to lay down your pet policies from the very beginning.
- Cleaning and Maintenance. If you want student tenants to keep your property clean and well-maintained, you should detail this responsibility in the lease agreement, too.
- Guests. Some student tenants might allow their friends to crash on their couch for days, even weeks, on end. To limit this behavior, it’s good to have a policy on guests and how long they can stay.
The Bottom Line
As you can see, renting to students has both its pros and cons. And while you can’t legally turn down students for the sole reason that they are students, you can minimize the risks that come with student renters.
Don’t want to manage your own rental property? Find a property management company today with the help of Rental Choice’s online directory.
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