If your rental property is located in a college town or near a university campus, renting to college students can be very profitable. Do you already own a unit within walking distance of academic buildings? Perhaps you’re thinking about investing in a rental property in a college town? Landlords near colleges and universities benefit from high demand, stable rental markets, and an ample pool of would-be tenants. However, renting to students can also have downsides — such as high turnover, poor treatment of the property, and late rent payments by young people with little financial management experience. So, how can you make sure that you protect your rental property when you’re renting to college students? Here is our landlord’s guide to renting to college students to help you mitigate the risks and ensure that your rental process flows smoothly.
Landlord’s guide to renting to college students
Know the risks
While renting to college students can help fill vacancies quickly during peak seasons, it does come with a unique set of risks. You might run into the following issues when renting to college students:
- A seasonal gap when college students leave for holidays
- A lack of credit history
- Less experience paying bills on time
- Potential for partying and noise complaints
Although renting to college students may conjure up images of wild parties, the reality is that renting to college students may be quite profitable. You have a better chance of reaping the benefits of college town rentals if you conduct the process correctly and mitigate risks.
Target the best tenants
One way to mitigate the risks of owning or managing property in a college town is choosing your renters wisely. The larger your pool of applicants, the more likely you can find ideal tenants. Use a variety of marketing channels, including online sources, to boost the number of people who apply. Moreover, make your ads as appealing as possible with photos and well-written descriptions. Once you get prospective tenants in the door, watch for red flags during the application process, including:
- Lack of references
- Resistance to a rental tenant screening
- Past credit problems
- Evasive answers about how many people will live in the residence
When you have interest in your rental unit, be sure to stick to the same screening process as you always would. Ask for references, such as previous landlords and employers. You can also request proof of how they will pay rent. Keep in mind, regardless of who is applying or who you are screening, you must stick to the same criteria and follow the guidelines of any fair housing legislation.
Require a co-signer
When you go through the screening process, one of the biggest issues you will run into is insufficient or non-existent credit history. It can be difficult to know whether or not someone will be reliable when they have no history by which to judge their responsibility. You also will often run into a lack of income, as a full-time student is likely not making enough money to cover your normal income requirements. As a result, having a co-signer is a good idea, because it helps ensure that the rent will be paid.
Communicate the terms of the lease clearly
If you accept a college student as your new tenant, start the relationship with clear communication. Be sure you go over the lease thoroughly and emphasize important information. Make sure you not only communicate the terms of the lease but also the consequences for violating the lease. The stronger the lease you create and the better you communicate the terms of the lease, the less chance you have for miscommunication. Be sure, though, that your lease adheres to all local laws and regulations.