Do you own rental properties near a college town or university? Are you expecting a lot of students to move to your area next semester?
If so, you may be considering marketing your properties as student housing. While you can’t deny other renters interested in your properties, advertising your units as ideal for students will attract many new renters each year.
There are many benefits of renting to students. However, many landlords hesitate to rent to students due to the additional risks associated with younger, inexperienced tenants.
Below are the pros and cons of student housing and some recommendations should you choose to rent your properties to students.
Pro: Little Marketing Effort Required
You won’t have to spend much time advertising your properties if you rent to students. This is because the location will usually market itself.
If your properties are near a university and clearly marked, students will find you. This means you spend less time actively seeking applicants and creating new marketing assets.
Information about your properties will spread via word of mouth as younger students ask for recommendations from older ones and parents chat about their students’ housing experiences online.
If you do need to advertise your properties, take advantage of campus resources to attract students. Social media is also an effective way to attract student renters.
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Pro: Consistent High Demand
At most universities, at least 50% of students have the option to live off-campus. This means from year to year, there will always be a consistent, high demand for student housing around universities.
Even if you have several competitors in your area, students will always seek out your properties for upcoming semesters.
Pro: Parents Often Shoulder Financial Responsibility
Students often lack a rental or credit history. They also won’t have significant income to shoulder the burden of rent themselves while attending college. For these reasons, parents often take on the financial responsibility of paying all or part of the rent.
By requiring students to provide a guarantor or co-signer’s signature on the lease, you can minimize the financial risk of renting to students.
What’s more, many parents are willing to pre-pay rent for a full semester, so you can be guaranteed of your funds without fearing late payments.
Pro: Fewer Amenities Needed
Students are rarely looking for the most modernized, renovated properties. After all, they’ll probably only be renting your properties for a few years.
Instead, students value affordability and proximity to campus. Keep your prices reasonable and advertise your convenient location, and you can fill all your units without the newest bells and whistles.
Although students are generally a profitable renter population, they do introduce some risks. One of these is inexperience.
Since many students are first-time renters, they may be more forgetful when it comes to paying rent or fees on time. They may also take less responsibility for addressing maintenance problems, leaving them to worsen over time.
If you rent to students, be sure to describe clear policies for late fees and maintenance procedures. Familiarize student renters with your property management software and make sure they know how to use the maintenance portal to report any issues.
Con: Risk of Property Damage
Students are not known to be the cleanest or most careful of residents. While many students are perfectly responsible, others may disregard the condition of your property, accumulate trash, or damage property due to neglect or inexperience.
If you decide to rent to students, property damage is one risk you’ll have to accept. However, you can mitigate this risk by performing regular inspections.
Provide student renters with a checklist of what to prepare beforehand well in advance of the inspection. That way, students will be more motivated to keep up with cleaning and take care of your property.
Con: High Turnover
Undergraduate students usually won’t stick around more than a few years at one rental. After they graduate, your chance of renewing their lease is low. If you rent to students, know that one to two-year leases are the norm.
To mitigate high turnover, consider renting by-the-bedroom. This way, individual roommates have the flexibility to move while you maintain the right to fill extra bedrooms with new tenants.
Understanding Student Housing
While several risks are associated with renting to students, many of these are reduced or eliminated with a few precautions. Keep in mind that renting to graduate students is a slightly different game—students pursuing master’s or doctoral degrees generally stick around longer, are more responsible and experienced renters, and require less strict policing. No matter what kind of students you target, the opportunity is bound to be a profitable one for your rental business.
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