Eventually, kids grow up and go off to college. It’s a natural progression for them, and they’re going to need a place to stay while they’re getting a higher education. While a lot of students may opt for the traditional dorm room, others prefer to live off campus so they can concentrate better.
For landlords, this can be a boon, but there are some things to consider before you decide to rent your property to a student. Risky tenants come in many forms, and students are no different. If you’re going to entrust your property to them, you should know what to watch out for.
THE GOOD: PLENTY OF TENANTS TO CHOOSE FROM
If your property is located near a college or university, you’re in luck. Every year, new generations of kids are leaving home – many for the first time – and pursuing higher education. That means your property is in a prime rental location, and many students would undoubtedly be happy to rent it.
In fact, one of the greatest benefits of renting to students is the “turnover guarantee.” Once a student has completed their studies, they’ll move out and make room for another student to move right on in. If handled correctly, you can guarantee a steady revenue stream for years, if not decades.
THE BAD: LACK OF CREDIT HISTORY
Young people lack credit; that’s just a fact. Unless they started working at a very young age and penny-pinched their way into a 700+ credit score range, chances are they won’t have anything in the way of established credit or collateral. However, with no opportunities to build a credit score, many young people become stuck in a financial rut.
If your tenant has a good history, no criminal violations, and is backed by a co-signer, such as a parent, it may be beneficial to rent your property to them. Your rent should be guaranteed, while the student can build up a solid credit rating in the process. If the worst does occur, and a student needs to leave, chances are you will find another to take their place.
THE GOOD: HIGHER RENTAL FEES
Supply and demand is a reality when it comes to any area of economics, and renting real estate is no different. If your house is situated close to a college or university, chances are it’s not too far from other attractive amenities and services, as well. With everything centralized in one key area, the attractiveness of your property shoots up dramatically.
That means you are justified in charging higher-than-average rent. Doubtlessly there will be many students competing to rent your property. All you need to do is decide which one is the best candidate, and watch the money roll in.
THE BAD: IMMATURE BEHAVIOUR
College students may technically be adults, but they have a long way to go before they’re considered grownups. The pursuit of higher education also includes drunkenness, hedonism and rowdy parties, all of which can spell trouble for your property. If you are going to rent out to a tenant, you run the risk of such behaviour taking place.
Even if you have a no-party rule stipulated in the contract, some college students may still participate in heavy drinking, drug use or other behaviour that they believe will go unnoticed. Make sure to lay down the law early on, and schedule regular inspections to make sure nothing nefarious is going on inside the walls of your property.
THE GOOD: STUDENTS AREN’T FUSSY
Students are so thankful to strike out on their own that they probably won’t care much about anything else. While it’s always a good idea to maintain your property, renting to a student usually means that non-vital upgrades and repairs don’t have to be prioritized. That means skipping luxurious kitchen and bath upgrades, and keeping things as they are for the time being.
Over time, you may wish to upgrade your property, but there’s no sense investing money into something that isn’t necessary at that moment. Students will spend a significant amount of time either studying, or sleeping. When they’re not doing either of those, they’re out on the town with their friends.
THE BAD: THEY MAY BE LAZY
Many kids grew up with mom and dad taking care of everything, from the laundry, to lawn mowing, and that can become a problem when they finally move out. Some student tenants are so used to living the cushy life under their parents’ roof that they may not be able to grasp the most basic of property maintenance rules.
This can manifest itself in everything from noise complaints and icy porches, to vermin infestations. Be prepared to draft a contract which lays out the rules in a clear and explicit manner, and make sure to schedule regular inspections to make sure they’re upholding their promise. Otherwise, irresponsible tenants can make short work of your property, which can cost thousands of dollars to fix.
CONCLUSION
If you’re interested in making a lot of money by renting out your property to a student, make sure to look at all the details. Otherwise, consider offloading the responsibility onto a property management company. RentCore has a lot of experience renting properties to student tenants, and we know exactly what to look for when it comes to choosing the right one, and making sure they abide by the rules.
For more information on how RentCore can help you achieve a stress-free rental experience, contact us today!