Renting To College Students: Is The Risk Worth The Reward?
As a landlord owning rental property in a college town can have advantages and disadvantages. College students may live in the dorms fora year or two but then decide communal living isn’t for them. Young adults ages 18, 19, 20, 21, out on their own, possibly for the first time can raise trust issues for property owners.
The main problem students usually run into is they have no rental history. This is a huge red flag for a property owner or property management company. Not knowing if a person is going to pay rent is the biggest risk anyone can take. Yes, it is a variable in any rental situation, but with those new to personal responsibility this can make or break a landlord.
However, there are ways around. With a little coaching renting to well screened college students can be the most lucrative business decision you make. Let’s take a look at the issues one by one.
No rental history
When a college student fills out the rental application without previous references to speak with regarding renta
l history, it doesn’t give a landlord much to show they will pay their rent. The good thing is no rental history is better than having a bad rental history. This can be further cleared up by asking for a parent to co-sign on the students behalf. Yes, legally they can sign court binding paperwork like a residential lease. However, knowing th
eir parents will cover the rent if the students fall behind is a safe guard you will not get any other time as a landlord. Co-signing guarantees payment during the lease period.
There are college students who are at school on scholarships, have student aid paying for housing or family helping them and they don’t have a job. After all, college is a place to focus on their higher education. Worrying about earning money to pay the bills is not a main focus for some. But as a landlord, no job usually means no rental payments. Again, you need to look at the larger picture. Renting to college students is a unique niche. If a student has a way to cover rent in advance, as with financial aid or a way to guarantee rent payment, as with a parent co-signing their lease being unemployed should not stop you from renting to them.
Yes, college can be synonymous with partying too much. This is a stereotype that’s not always accurate. Older tenants who have rented many places can have worse parties causing thousands of dollars in damage without thinking about it. Many first-time renters are afraid of getting on a landlords “bad side”. Partying or doing anything to possibly break their lease is enough to keep any gathering to a dull roar. Most gatherings doesn’t involve damage or a police presence if done correctly. When you go through the lease with a new renter be sure to point out policies and explain lease violations. You’ll find most young renters will most likely be your best tenants.
Renting to college students can be more cyclical than regular rentals. You will have your rental full during the winter months in Wisconsin. Which is the worst time for any property owner to have a vacancy, but you may have a vacancy every summer. Compared to year to year renters, who could give notice at any time. College students are more of a captive audience. They need to attend their full year of classes and moving in the middle of the year on top of school work and a job is too much to worry about. So they at least stay through their lease period and you often have 10 months of continual rent.
While the amount of damage left behind can be questionable, most young adults are not flush with cash. They need their security deposits back to be able to pay rent at a new building if they move. Landlords will often find the rental property cleaner than when they rented it out originally. The student’s parents may also help in this situation if they cosigned the lease. They don’t want to pay for damages caused by their students and often help them clean when they move out.
Proper tenant screening can keep irresponsible tenants out of your properties. However, with college students you can safeguard your investment with a little extra security like co-signers and thorough explanation of the lease agreement. Often you’ll have your rental occupied for 10 months out of the year and a quick turn around due to the good condition the units are left in. Some students decide to stay in the same rental their entire college term. If you’re lucky that could mean a continual 4 years. As with any rental, if you keep your units in good repair, clean and functional you’ll have happy tenants. By keeping your college rental in good condition, you could have 4 years of guaranteed cash flow.
To see how we can help you maximize your rental property, give Day Property Management https://www.daypropertymanagement.com a call at 920-968-0626 or fill out our contact form https://www.daypropertymanagement.com/contact for more information.