Is renting to college students a good idea? Is student housing a good investment?
Investing in student rental properties is becoming more popular by the day because of the steady income it guarantees. But, renting house to college students can also become risky as students as a category is inexperienced and a tad careless.
Given below are other advantages and disadvantages of renting to college students that can help you decide whether to invest in student accommodation properties or not.
Buying Rental Property in College Towns
Buying rental properties in college towns can be extremely lucrative because there will never be any dearth of renters there. Even as students graduate and leave, there will always be a new batch of students looking for decent rental accommodation.
Some of the advantages of buying a rental property in college towns and cities are:
Steady Income Guaranteed
Since your property will never have to face vacancy you will be guaranteed a steady income.
Better Rent Rates Than Other Residential Areas
Because of the high demand you can get better rent rates of the property than you would get in any other residential area of the town/city.
Students generally prefer to rent out in groups so that the rent can be divided. You can easily take advantage of this fact and demand a little higher rate. Just remember to keep the rate affordable and competitive to attract renters.
No Need to Upgrade
Students are typically looking for simple accommodation where they can sleep and do some of their work. Since they will be spending most of their time in the college campus they will not expect the rental property to be high class.
Some basic things that students look for in a rental accommodation are:
- Basic utilities in working condition
- High speed internet connection
- Safe surroundings
You will not need to invest in any renovation work of the property.
Despite the obvious advantages of a student rental property, people still think twice before renting out to college students because of the risks involved. Listed below are some pros and cons of renting to college students that can help you decide whether you want to be a landlord to students or not.
Benefits of Renting to College Students
Apart from the advantages discussed above like steady income, no risk of vacancies and cost saving on renovation, given below are other advantages of renting a house to college students.
No Risk of Unpaid Rents
Generally, parents bear the rent costs and they even pay in advance. Hence, there are no risks of unpaid rent or late payments.
Low Advertising Cost
Renting to college students is a very easy process. You hardly need any advertising and word of mouth is sufficient to advertise that you have rooms to rent for college students.
Students are not very particular about the details of a house. They won’t mind small kitchen top space or any other minor house blemishes. They are easy going renters who will not bother you with small complaints.
Disadvantages of Renting to College Students
Though there are many advantages of renting rooms to college students, there can be certain problems because of the obvious inexperience and immaturity level of these young people.
No Way to Screen Renters on the Basis of Credit Score
Students have no employment or credit history and you will not be able to screen them based on a credit score. But, as said previously, parents of students pay the rent most of the time hence you will really not need to screen the students financial history.
If you are worried about non-payment of rent then get the lease co-signed by the parents. This way you will minimize any chances of late or non-payment of the rent.
Inexperience and Carelessness Can Lead to Damages
Due to lack of experience students are generally not very careful while using appliances. They are also not mature enough to recognize any signs of damage like a leaky roof. They might not report many problems to you thinking that they are not important.
Some problems if not taken care of quickly can lead to major damages.
Make sure to take security deposit from the students with the first month of rent itself. The deposit money will come in handy if and when the students cause any damage to the property.
Students Can Be Noisy Renters
Students can be noisy especially if they have friends over for the night or for some party. This can trouble the neighbors who can in turn complain to you. You can mitigate this problem by having a quiet hours’ policy written in the lease agreement.
Will Have to Find New Renters Every Year
Students do not stay for the full year and move out during their summer break. Landlords of student rental accommodation have to find new renters every year.
Finding renters at the start of the new term is not a problem but filling a summer vacancy can be really difficult if most of the renters in that area are students only.
Though there are certain disadvantages of renting to college students, most of these problems can be overcome by making certain house rules and adding them to the lease agreement.
House Rules for Renting to College Students
- Visit the house to inspect every once in a while, to know if everything is ok or not.
- Set some quiet hours during the day/night.
- Keep strict rules regarding stay of guests.
- Install a CCTV camera at the entrance to keep a check on the number of visitors.
- Include rules related to fireworks and pets in the lease agreement.
- Add some amount of late fees.
- To prevent misuse of heat, electricity and water make the students pay the utility bill.
Wrap Up – Pros and Cons of Renting to College Students
Renting a room to college students is overall a profitable business. By making a strict lease agreement and establishing house rules you can mitigate most of the risks associated with the renting process.
Just make sure that your rent, security deposit and house rules follow the various renting laws and regulations of your state and city.