College towns often have a higher rate of renter-occupied housing than other towns, which can give rental property owners and property managers a reliable and steady stream of tenants and income. For this reason, college towns usually have a high rate of real estate investors. As lucrative as renting to college students can be however, experienced property managers like Martin Feinberg understand that there are risks involved as well as benefits and know how to protect themselves and their owners’ investments while maximizing on the opportunity that college students often represent.
Though college students often lack rental or credit history, as long as precautionary measures are taken student housing can be a profitable stream of revenue. Some of these benefits include:
- Reliable TenantPool-college students typically create a high demand for rental units in an area.
- Steady Rental Income-When the economy is struggling, college enrollment usually increases, helping to keep rental prices stable. Plus, many college students receive rent help from their parents, which keeps profits more stable as well.
- Fewer Vacancies-Increased demand means increased occupancy rates.
- Easy Marketing-Increased demand also means less time and money spent marketing properties.
- Easy Renewals-Most college students will need housing for 2-4 years and knowing that allows experienced property managers to send out lease renewal information early.
As profitable as renting to college students can be though, there are still risks involved, which property managers much acknowledge and mitigate if possible. Some of these risks are:
- No Full-time Employment or Rental History-Normal tenant screening criteria will not work with most college students so determining who will be a responsible tenant and who wont’ be is much more difficult.
- More Wear and Tear-College students are living on their own for the first time and may not understand the need for property maintenance. They also may not have the knowledge necessary to take proper care of the unit or the things within it.
- Roommate Mediation-Lack of experience and immaturity also often creates roommate conflict that property managers might be asked to help resolve. There is also an increased likelihood of a roommate not understanding their financial responsibilities and attempting to move out before the lease has expired.
- Parties-College students are on their own for the first time and sometimes use that freedom to push boundaries with parties. Social gatherings can cause property damage and also disrupt other tenants.
One way that property managers can alleviate the risks associated with renting to college students is to require a co-signer or guarantor who will be financially and legally responsible for the property. Such co-signers need to be vetted through normal tenant screening procedures though to ensure that they can handle the responsibility they are signing up for.
Landlords can also check school records to look for red flags such as disciplinary actions or academic probation for all perspective tenants. These can be signs that the student might not be ready for the responsibilities of renting.
Collecting the maximum security deposit legally allowed is another good way to offset risks when renting to students. Such increases must apply to everyone though and not only college students.
Property managers that rent to college students should also require renter’s insurance. This is an inexpensive way for college students to protect themselves while protecting the rental property at the same time.
Lastly, all property managers who are considering renting to college students must have a rock-solid lease, and must review every aspect of that lease with the tenants before it is signed. Issues like late or missing rent payments, obligations for paying rent throughout the lease term, and policies on pets, guests, quiet hours, and common areas need to be explicitly explained and acknowledged.
When property managers or rental property owners take into consideration the benefits and risks to renting to college students, and they work to mitigate those risks while maximizing benefits, the consistent stream of potential tenants and competitive rent prices can make renting in a college town both lucrative and fulfilling.
