If your properties are located near a university, you’ve likely considered renting to college students.
But the risks are no secret: College-aged renters are notoriously inexperienced, irresponsible, and apt to rent for short periods of time, causing high tenant turnover.
However, if done right, renting to students can be one of the most financially lucrative decisions you make for your rental business.
So how to you minimize the risks associated with student renting while maximizing the returns? By understanding the needs and tendencies of the target population and responding appropriately, you can make student renting a highly successful endeavor.
Here are three tips for renting to college students.
#1 Require a Co-Signer
When renting to traditional college students (ages 18-22), one of the best preventative measures you can take is to require a co-signer.
A co-signer, or guarantor, is a person responsible for paying the student’s rent should the student be unable to as agreed. A co-signer is usually a parent or other older family member.
Co-signers can serve a great benefit to both you and the student renter. For one, it’s unlikely that a student recently graduated from high school will meet your income requirements. One or two part-time summer jobs will not equal three times your monthly rate. An older, more experienced co-signer, however, is much more likely to meet your criteria.
By requiring a co-signer, the student can get approved to rent your property, while you can fill your units with the population most in need of housing near the university.
#2 Rent By-the-Bedroom
Another best practice for student renting is to rent by-the-bedroom.
In a by-the-bedroom lease structure, each tenant only pays the amount of rent corresponding to their bedroom and a portion of the common area costs. Each renter is only responsible for their part of the rent.
If one tenant defaults on the rent, the others won’t be punished. This is a great structure for students, who don’t have the resources to cover their roommates’ rent or the motivation to do so.
Renting by-the-bedroom also benefits you, as you can fill more units to full occupancy. Each bedroom constitutes another rent-paying tenant. If a group of three roommates decides to rent a four-bedroom apartment without a fourth roommate, you can require each roommate to take on an equal portion of the fourth bedroom’s rent.
The by-the-bedroom lease structure contrasts with a traditional lease structure, wherein the roommates together are jointly responsible for paying the rent each month. If one roommate defaults, the others are responsible for covering for them. This structure isn’t suited for roommates who may or may not know each other well and don’t want to be responsible for one another’s rent.
Switching your leases to by-the-bedroom is easy with tools like property management software. You can make the designation on your management platform and the software will automatically divide the rent equally or proportionally, depending on bedroom size and amenities.
#3 Enforce Routine Inspections
Lastly, landlords renting to college-aged students should prioritize routine inspections.
Inspections are important for any renter population, but especially for students. Students are inexperienced renters, and most will need extra reminders to follow rental rules and expectations.
Inspections are your opportunity to ensure students are properly caring for their units. They can also help you prevent disasters born out of negligence or inexperience before they occur—for instance, you can remind student renters how to prevent pipes from freezing during the winter.
Inspections are the best way to keep an eye on your property when renting to underexperienced tenants.
Conclusion
The benefits of renting to students are many: high demand, plenty of applicants, and few vacancies from year to year. However, preparing for the nuances of student renting is the best way to protect your business in the process. By following these three simple tips, you can ensure a quality renting experience for both parties.
