How To Lease To College Students?
If you rent housing to college students, there are specific things you need to know.
College students these days are a unique demographic and a bit non-traditional.
They’re no longer strictly eighteen- to twenty-two-year-olds, for example.
Understanding who you’re renting to and what their needs are helps set you up for better landlord-tenant relationships with your college renters.
What is Today’s College Student Demographic?
The non-traditional makeup of today’s college students is good news for landlords. As the statistics below demonstrate, many modern college students fit into one of the following “non-traditional” categories:
- 20% are at least 30 years old.
- About 50% are financially independent of their parents.
- 25% are caring for a child.
- 47% go to school part-time at some point.
- 25% take a year off before starting school.
- 40% attend a two-year community college.
- 44% have parents who never completed a bachelor’s degree.
This change in the typical college demographic means students are more likely to have a somewhat steady income and credit history than in the past. This works in your favor because it enhances your ability to figure out which prospective tenants are more likely to pay on time and in full.
Keys for Leasing to College Students
Before you rent to college students, make sure you know the local laws and understand what is required of you. Let’s look at six keys to success when renting to this demographic.
1. Keep a Consistent Tenant Screening Process
Screening tenants is a vital part of being a landlord in general. And this market is no exception. Even though college students often have less background history and credit built up, it’s still important to learn about potential tenants, especially because of the high turnover associated with leasing to students. You need to ask the right questions.
You’ll want to know things like job history, credit scores, income, criminal background, and prior evictions.
2. Collect a Security Deposit
Security deposits are critical when it comes to leasing to college students. We know that every student isn’t a party-obsessed problem child, but the reality is that college students can be tough on your property. Parties often lead to property damage, and you want to have some protection in place in the event a party causes issues.
Requiring a security deposit is a smart business move. There isn’t a set rule on what to charge, but here are a few helpful tips to figure out what makes sense for you:
- Move-in fees could be a good alternative if your tenants are only staying for a short time.
- Security deposits are closely regulated, so research state and local laws.
- You can charge move-in fees and a security deposit (this isn’t uncommon when renting to college students).
3. Request a Co-Signer
Generally speaking, requiring a co-signer is a good idea when dealing with college students. If you’re not going to require a co-signer, get at least a couple of years of rental references and ensure your tenant is highly reliable.
A co-signer absorbs the responsibility of rental payments when a student cannot pay. As you can imagine, this is a very useful backup plan; you don’t want to chase around college students for rent payments. This method makes sure that the onus for payment falls on the co-signer and the student.
With this being said, you should also screen the co-signer. You want to make sure the parent or caretaker is reliable and has a steady financial income.
Lastly, college students are more likely to pay rent if they know their parents or caretakers are on the hook if they miss payments. That added pressure is a good thing because it takes the responsibility off of you and gives your tenants further incentive to make on-time payments.
4. Require Renter’s Insurance
Requiring renter’s insurance provides a fail-safe in case of a break-in or personal property damage to students’ possessions. College students may not be aware of renter’s insurance, so mention it in the lease and in person, if possible.
5. Add Periodic Inspections to the Lease
Detail in your lease that you will be conducting periodic inspections to be sure minor problems get addressed promptly. While this isn’t a bad idea in general, it’s especially useful when renting to college students, who are often less experienced and may overlook things that other renters wouldn’t.
You should always provide notice before doing this, though. Giving at least 24 hours advance notice is a good rule of thumb.
Be sure to take pictures before and after the students occupy your rental. You want to have concrete photos of how your property looked like prior to them moving in and what it looks like after (in case you need to keep the security deposit).
6. Clearly Outline Rules and Expectations in the Lease
Another aspect of inexperienced renters is the need to spell things out for them. Thus, you must fill your lease with key details, such as rules about not smoking in the house, quiet hours, etc.
Also, make sure you set expectations around the following:
- Renter’s insurance
- The process for maintenance requests
- Cleaning responsibilities
- Temperature adjustments and allowances
- How to pay utility bills
- Taking care of simple tasks like replacing broken light bulbs
- Noise complaints, underage drinking, and property damage
While many of these things may seem like no-brainers to you, they might not be as apparent to someone who’s renting for the first time. The clearer you are at the beginning, the fewer headaches you’ll experience later.
Charge Fair Prices
Lastly, remember that most college students (even non-traditional ones) don’t have a lot of extra money. They want the best deal they can find and have lower expectations than traditional tenants. Therefore, college rentals don’t need to be as carefully taken care of as other rental properties. This doesn’t mean you should let your rental fall apart; it simply means you don’t need to invest as much into these properties as you would with standard rental properties.
These factors should allow you to charge a little less for rent, while still making a profit. Do your research on the local market and see what other landlords who rent to college students are charging. Also, be aware of any laws or regulations that might impact your pricing. You want your prices to be reasonable, competitive, and sufficient for your business.
Conclusion
Leasing to college students isn’t rocket science. You want to protect your property while making it as affordable as possible.
