Are you considering renting to college students? While there are debates about the disadvantages of renting to college students, you might hit a goldmine with renting to college students if you have a property in college towns. There will be consistent demand for housing, and it’ll help you bargain for higher rents. However, having college students as tenants can be intimidating. So, before renting to college students, here are three major things you need to consider.
1. Rent Reliability
One of the main concerns of investors is whether the student tenant will pay rent on time or not. When renting to a student, you need to follow the same tenant application and screening process as you’d do with any other job-holding tenant. Although students do not have a complex credit history of reporting income, you need to be thorough with the payment procedure. Ask for their parental contact information, how they will be paying rent, and even acquire information about where the money will be coming from. Most of the students either have loans or financial aid, and some even borrow from their parents. If your tenant refuses to share the information, it might be a major red flag. Make sure to include in the agreement the penalty of consistent late rent payments.
Nevertheless, arrange a backup setting like an emergency fund to cover any property expenses if your income is less than you expected. Be prepared as a landlord to receive few late rent payments as students may face financial crisis from time to time. However, do not be vague about the strictness of paying on time, especially if they lack a strong renting history.
2. Possible property damage
College students can sometimes act like teenagers. You might have to deal with increased wear and tear, inadequate maintenance of your house, and even noise complaints. Don’t lose hope. The best is to prepare yourself for any property damage by saving an emergency fund and having parental contact. You need to directly communicate with your student tenant to prevent any issues. If they call for any plumbing or electrical problems, try to solve the issue as soon as possible instead of letting the small problems get out of hand. Ask the tenants to maintain open communication with you. If possible, acquire renters’ insurance for additional safety.
3. Follow Local Regulations
It is important to follow all the rules and regulations to protect students living in high occupancy places. For most states in the US, investors are required to have an annual license approved from the state to continue renting to students. The officials will inspect the overall condition of your property, measure fire and safety alarms and other measures for tenant’s safety. You need to follow the regulations and be responsible for ensuring that your student tenant is aware of the residential laws.
Conclusion:
The benefits of renting to college students are many; however, it comes with its risks. To maximize your profit, you should consciously consider the mentioned things above and be aware of the challenges of renting to students.
