Property Management: Student Rentals
If you’re a landlord with a rental property located near a college or university, you’ve probably considered student rentals. You’ve also probably been scared off by the notion; students have the bad rep of being loud, noisy, destructive, messy, and faster at wearing your property down compared to regular tenants. With this kind of a profile it’s understandable why most landlords scoff at the idea, especially those who have signed agreements with bad tenants in the past. With that said, renting out your property to students can be very profitable, and very often students end up being fantastic tenants. Doing your due diligence in regards to a thorough screening process will greatly eliminate the risk of you entering an arrangement with a bad tenant. So consider student rentals. Here’s why:
It’s in Demand
The student rental market is growing at a rapid pace in North America; more and more young adults are enrolling in higher education. The need for student housing is very real, as enrollment has seen a steady growth over the last decade. It’s a niche worth considering; student housing has typically seen a higher rate of occupancy in comparison to residential occupancy, meaning you are less likely to be left with an empty unit.
Less Worry of Receiving your Rental Payments
Parents are normally the one’s covering the cost of their child’s schooling and the added costs that come with it i.e. rent. The parents have already invested a ton of time, money and energy in their child’s future and the last thing they want is to jeopardize their kids living arrangement throughout the school year. Typically, these are responsible parents who will handle the payments without fail.
In the case that the parent isn’t handling the monthly payments for their kid, you can typically get the student to sign a parent guarantor form. This would allow you to go after the parents if the student is in arrears.
Students Are Often Great Tenants
I say this loosely, as there are always exceptions to the rule, but generally, students are among the responsible of the young adults. Responsible parents breed responsible kids. Moreover, student renters tend to be less picky. They’re more concerned with the school year, and tend to have lower expectations compared to non-student tenants. You’ll be far less likely to encounter a “professional tenant”, who can make your landlord experience a living hell. Furthermore, students are far less likely to have pets, smoke, or have a kid of their own. These are 3 very common problems when dealing with standard tenants.
You’ll Often be Paid Up Front
Parents are very willing to pay up front for the year. It’s a lot easier for them to simply cover the payment all at once rather than deal with another monthly bill. Payment up front means you’re covered; no chasing tenants for payment.
If You Own a House, You Can Make More Money
Student rental properties are typically rented by the bedroom. In a non-student scenario, you’ll have a very hard time renting your house out by the room. You’ll likely have to rent out the entire house to one family, or one group of people for a set price. With students, renting out each room can mean a much larger return, as the tallied price of 4 students renting individually can certainly exceed that of an entire house rental. Not to mention, you can convert other areas into other rooms. For example, the basement can be converted into either one or multiple living spaces, making your return on investment much larger.
But What About the Risks?
Sure, there are some risks. With students, this is typically their first time away from home. They are young, impressionable, and may lack maturity. Many university and college towns are also known as “party areas”, so you do run the risk of some parties being hosted in your rental property. Regardless, you run risks by renting out a property either way you slice it. By undergoing a diligent screening process, you can pinpoint potential trouble makers and choose not to rent to them. Again, many young people enrolled in higher education are very responsible individuals who can be trusted. In comparison, very often non-student tenants lack education and maturity. So the students may be young, but they still might treat your property with more respect vs a non-student. That combined with the potential for more income, and the potential of being paid up front/not having to chase your payments every month, makes student tenants a great prospect.