You may see college rentals as a gamble. Yes, college students aren’t known for taking care of a property. But, there are ways to limit the risk of damage to your property and access the benefits of student housing. Here’s what you should consider before you start advertising your property to students.
Benefits of Renting to Students
College students typically pay higher rent and use lower than average amenities. That’s because students care most about the location of their rental in relation to campus and if your property is nearby, you’ll see high demand. Also, many students take laundry home and eat and spend time on campus or with friends and family, which means they’re using appliances less frequently.
Here are some of the benefits of renting to students that families and single professionals may not offer.
1. More Efficient Rent
If you have a four-bedroom property, you can rent it to four students. This allows you to charge each student more than you would be able to charge a family in the same space. Plus, as students usually turn over each year, you can continue raising the rent as market conditions change. If you had the same tenant, you would need to abide by the legal limit on rent increases, which is usually around 1.5 percent per year.
2. High Demand with Less Investment
Cities with universities and colleges naturally have high demand for rentals, so you don’t have to worry much about vacancies. You also don’t have to invest in high-quality features and amenities in your property to attract these students, as you may need to do in order to create high demand from families or professionals.
Plan to Reduce Risks
There are some risks to renting to students. However, these can mostly be avoided if you plan ahead.
1. Avoid Late or Missed Rental Payments
Students are low on cash and may not be used to managing money. Further, it’s hard to assess which students are a safe risk as most don’t have a strong credit history or even a former landlord you can call. The solution is to require a parental co-signer. The parent will keep their child on track. Worst case scenario, you can get your missing rent from them.
2. Reduce Property Damage
As students haven’t owned their own home before, they usually don’t know how to care for the property or how to identify warning signs when something has gone wrong. They also may not be aware of how their behaviour affects others.
You can make up for these shortfalls in a few ways:
Have students pay for their own utilities.
Where legal, consider charging a rental deposit.
Remind students of local noise bylaws when they move in.
Keep lines of communication open, so students are more likely to contact you with problems.
Check-in with students to remind them of warning signs that could cause potential property damage.
Thinking of renting to students, but not sure how to handle the risks? Central Erin Property Management is experienced in minimizing risk from college rentals and maximizing your return. Reach out to us for a property management proposal today.