Over the past few years, the property management industry has seen a surge in student housing. The highest cost of living, in many areas, is around campus or near the local Universities. If you have property in a larger city the rent price may even soar upwards of 100 percent or more if it is close to a University. It can be an incredibly fruitful investment for property owners to buy into student housing, as rents are usually driven up dramatically in neighborhoods within walking distance of campus. With this in mind, you should certainly consider renting to students in your area.
Studies show that the amount of students who are attending college will increase by over 14 percent within the next 8 years. Since there will be more students attending school, the money will continually become more easily available through student loans, which has been reason for student housing to explode over the last decade.
This exciting phenomenon has caused a large number of investors to purchase property in off-campus student housing. If you are someone interested in buying into this trend, go over some strategies with the experts over at Utopia Management. Since 1994 their expert managing of all rental property and services has brought smiles to all of their clients over the years.
Always sign a one-year lease
Students tend to leave every year for the summer, and if they have the opportunity they will only sign up to pay rent for 9 months of the year. Luckily most contracts are not written for under 12 months, so while your tenants are gone you will have time to make repairs and touch up the place. Since most college towns turn into ghost towns during the summer, you will need to make sure you have a singed one year lease so that property stays rented throughout summer.
Always sign a joint lease
A joint lease is when each resident is fully responsible for the complete terms of the lease. That means that if a student drops out of college, or decides to live somewhere else, the remaining roommates will still be responsible for the rent in its full amount. This also means that if you post notice for rent and only one tenant sees it, under the terms of their contract all of them are seeing it. This is incredibly important for all property owners to know while renting to students because the students will police themselves under these terms. If one tenant cuts out early on their lease, the others will surely try and track them down so they don’t have to make up for the missing portion. Since students can be flaky and filled with drama, you do not want to be caught down chasing everyone who cuts on their lease.
Charge a high deposit
Students can be extremely hard on your property. You may want to max out your areas rental deposits to cover any potential damages a group of rowdy college students may cause. Some areas college aged residents have been known to destroy beautifully renovated homes. It is highly cautioned to protect your investment so you may cover any damages during the turnover period.
Take advantage of technology
We are living in a time where most college students have never written a check before. Everything is automatically done over platforms like Venmo, Cash-App, Pay-Pal, and Zelle. The digital potential for this is changing so fast, if you are not up to date on it you will certainly lose money and tenants. The days of collecting paper checks or bundles of cash are long gone, so make sure you are leveraging new apps while you are renting to students.
Most college students will have a dramatically limited rental history or none at all. If you consider that with their part time minimum wage job and virtually no credit history, you have a less than ideal candidate you could want. As a property owner, you need to make sure your tenant has a financially qualified co-signer who can be fully responsible for the rent if anything happens. Some students may have the luxury of meeting all financial obligations, but you need to be readily prepped to work with a lot of co-signers from the start.
Add a no party clause
There is, however, one important thing to consider when you rent to students. Before you have any new college student sign a lease, sit down and speak with them over what it means to have a no-party clause in the lease. These no-party clauses typically state that no gatherings with more than 20 people are allowed on the property. There are other policies that can be added at the landlord’s discretion.
As student housing grows each year, it is a nice idea for real estate investors to try renting to students, because if you get a place close enough to campus, you can almost guarantee a chunky return every year. This route is virtually recession-proof for property owners because people will always go to school and need a place to live even if they can’t afford it.