November 26, 2019
The Benefits (and Risks) of Renting to College Students
Across the U.S., there are well over 20 million students enrolled in public and private colleges. Statistica reports that “there is a high demand for student housing, with a vacancy rate of about 2.6 percent in 2018, a figure which is expected to decrease to 2.3 percent in 2019.”
If you’re considering pursuing this attractive student rental market, it’s important to understand the distinctive benefits and risks that come with student renters.
There is no doubt that investing in and renting student housing can be a lucrative prospect. Some of the many benefits include:
1. A Homogenous Target Market
Unlike a multi-family property, that could be a mix of families, friends, single professionals, etc., students are a consistent target market. They tend to look for some key features in their rental, which can make marketing easier.
- Proximity to the College: Students don’t want to have to travel far to get to school. One of the aspects to really tout in your ads is the ease of getting to the college. If your property rental is within walking or cycling distance be sure to boast about it! If your student rental is a little farther away, talk about public transit – that it is near several bus routes or close to the subway.
- Close to the Action: Students want to be able to grab a coffee or dinner together, go see a movie or go shopping with friends. When marketing to students your ad should include information about the location and how they can take advantage of dining, shopping and entertainment options.
- Amenities: Students are savvy, and are looking to get the most bang for their buck. If you are marketing to students it pays to include a WiFi bundle. Storage spaces for bikes, parking spots and in-suite or on-site laundry can help tip the tables in your favor.
- Maintenance & Safety: Even though students aren’t expecting the latest upgrades or granite counters, they do expect a clean, well-maintained and safe place to live. So a fresh coat of paint, unsoiled carpets and tidy common areas are demanded. Security cameras are a bonus for female students.
2. A Guaranteed Market
Students renters represent a steady stream of income. Even with dips in the economy, the student market is relatively safe and secure. Not all students get on-campus housing, and so your student rental may be exactly what they are looking for. While students are more likely to move more often due to trying to find a better place/location, or change of roommates there will always be a constant demand for student housing.
3. You Can Command Higher Rents
Most students enjoy having roommates. With a roommate, they have a built-in support network and can pool their resources for rent, utility and food costs. And, there’s help in taking care of household chores like tidying up. Because of the combination of higher demand for student rentals as well as the fact that students can divvy up the rent between roommates, property managers can ask for higher rent.
4. Parent Guarantors / Rent Payers
Parents often support their kids while they are in college. Some parents will pay for their rent, while others will help if their child is short on money. Despite the young age, and inexperience in dealing with finances, it can often be a safer bet to rent to students as parents will either pay the rent or act as a guarantor.
It seems like for every plus there is a minus, when it comes to student renters. However, with modern technology, there’s also a solution.
Some students lack self-control, and once out of their parents’ house will have loud parties or, with the help of alcohol, damage the property. Typically, student rentals wind up with more wear or tear than other types of properties. It often boils down to the fact that they don’t fully understand the responsibilities that come with renting and “adulting.” As well, students are more likely to turn a blink eye to a dripping tap or a mouse until it turns into a bigger issue.
The best thing to do is to make everything clear from the start. Educate your first-time renters on how ALL tenants have the right to a quiet and peaceful place to live. Use your leasing agreement and the welcome package to outline your policies on noise and spell out the consequences for breaking the rules. Also discuss how to use the maintenance portal to report needed repairs.
2. Late Rent
New to budgeting, some students may come up short at rent time. Many student rental property managers report that late rent is one of the top drawbacks of renting to students. However, it doesn’t have to be this way.
There are a great number of methods to minimize the risk of chasing down collections. Firstly, use property management to facilitate rent splitting among roommates. This way, at the very least, you receive a portion of what you are due. Make sure you enable online payment options, as students are not familiar with checks. As students are often first-time renters, you can ask for a parent guarantor or cosigner who can opt to pay their child’s rent by credit card or EFT.
3. High Turnover
It’s the nature of student rentals – kids come and go. Even though their degree may take four years to complete, students tend to apartment hop. It’s really not uncommon for some student to move every year or two. Despite the turnover, in most college towns, there is a lack of student housing, which makes filing your vacancies easier.
Once again, use your property software to stay on top of lease renewals and be proactive about finding out earlier rather than later who is staying and who is leaving. Use automated ILS marketing to fill your vacancies sooner.
Use Property Management Software
With Property Vista’s software solution, you can automate tasks like marketing your student rentals and make coordinating move-ins and move-outs effortless. It’s also so easy for students to sign split the rent automatically and pay by a number of flexible online options. If you’re looking to improve your operations, check out our pricing and get a demo.