The Vacant Free

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Written by Chelsea Glaser
on July 17, 2019

If your rental property is near a university, chances are you’ve considered whether or not you want college students for tenants. Your mind may be flashing to rowdy house parties and tipped over red solo cups, and you’re probably wrinkling your nose at the very thought of that stale old beer smell. There are definitely pros and cons about renting to college students, but the fact remains that at most universities, student housing is in high demand and can be a great revenue source for you. It’s important to weigh the risks with the potential rewards.

The most notable concern about renting to students is high turnover rates. At the end of nearly every school year, you’re going to have students moving out and you’ll need to fill the vacancy. Unlike renting to families or professionals, it’s unlikely that students will stay living in the same place for more than 1 or 2 years. Especially if you manage more than one student rental, you may want to consider utilizing some tools that can help you fill vacancies faster and make the turnover process more time and cost-effective.

Additionally, many students don’t have a credit history or proof of stable income as they enter into a lease. You may need to have parents involved or require a cosigner to prove that they will be able to pay their rent on time and in full every month. They also don’t have as much experience paying their bills on time and may need some extra support in remembering to submit payments. However, for some, the lack of experience and the nerves that come with taking on a new responsibility may just lead to perfectly on-time payments from your overcautious tenants.

Especially for first-time renters, you may need to spend more time explaining the terms of the lease agreement. Make sure they understand policies about guests, subletting, noise complaints, and damage that would result in a forfeit of the deposit. As many college students rent a house together to split costs, it can be really helpful to designate a primary point of contact among them. This way, you don’t have to worry about 3 different people contacting you about the same problem, but instead all tenants let the primary contact know if there’s something to contact the property manager about.

With groups of students, change can happen quickly and you may have a higher rate of tenants breaking their lease mid-year. From friendship fallouts to school transfers, things just happen. One way to manage the change without impacting the entire household is to create individual leases for each person. The benefits to a property manager include more revenue potential as you can charge more per room, and that if one tenant breaks their lease, it is no hassle for the others as their leases are not impacted. With a joint lease, the rent for the entire apartment needs to be paid in full, regardless if somebody leaves— the risk with an individual lease is that turnover of 1 person in the household may result in loss of revenue, and it can be hard to fill a student vacancy mid-year. Before making a decision on how to structure your lease agreements, do some research on student housing trends in your area to see if individual leases are common.

Depending on the location of your property, renting to students can be a profitable market to tap into, but it does come with risks. Don’t get us wrong— not all college students are destined to trash the place and be late on their payments. Many students are responsible, quiet, hardworking, individuals who will treat you and your property with respect. Being aware of the potential risks and taking preventative measures can help you and your student tenants have a great relationship.

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