If you’re looking to get into the real estate game by purchasing an investment property to rent or lease, you may also be considering taking the plunge into renting near college campuses or in neighborhoods with a younger population. While choosing to own property in these two areas will give you a great pool of potential renters from whom to choose, it can also come with a unique set of challenges that many landlords don’t have to face with more seasoned or established renters.
With that said, renting to college students or young adults can prove to be a great investment choice for you if you understand what some of the potential pros and cons are beforehand. To help you be as prepared as possible, here are five things to keep in mind when you’re considering renting to young adults or college students.
The lives of many students or young adults aren’t as consistent as those who are out of college or working full-time. Because of this, you may have reason to be concerned about your tenants making their payments in full, or on time, each month. To help put your mind at ease regarding finances, you may want to require a co-signer on lease agreements. Stephen Michael White, a contributor to RentPrep.com, states that, by having a parent or guardian co-sign on a rental agreement, you can have more leverage for collecting unpaid rent or taking legal action, if necessary. Not only does this serve as a protection for you, but it also helps to keep your tenants responsible for the financial part of anything that they agreed to when they signed your lease agreement before moving in.
Customize Lease Agreements
The lease that you create is going to be the most important document you have for your rental property. As such, you’re going to want to make sure that you’ve covered all of your bases within the document. To ensure this, ThePreferredRealty.com recommends for landlords to customize the lease agreement for each and every tenant staying in the property.
When attempting to customize your lease agreements, it may be wise to include clauses that may seem like common sense to you but could become issues among the tenants if not clearly expressed in writing up front. Some of these clauses could include quiet hours, maximum occupancy regulations, rent and utility responsibilities, move in and move out procedures.
Give the Option to Sublet
While renting to college students or young adults can prove to be highly profitable for you, it can also be a much more involved process than if you were to rent to a less transient population. One example of this is that many student renters don’t plan to stay in a property year-round. When this happens, you could have a vacant property for a few months out of the year, making your rental situation less profitable.
To combat this, Sarah Gabot, a contributor to Zillow.com, suggests for landlords to consider giving their tenants the option to sublet to other renters when they plan to vacate the property for an extended period of time. By giving your renters this option, you take some of the responsibility of finding new tenants off of yourself while still getting a continuous revenue stream. However, it may be a good idea to work with your current tenant to find subletters whom you can trust and who’ll respect your property and the rules that you’ve already put in place.
Be Prepared to Deal with the Unexpected
Because this may be the first experience that your renters have with living on their own, you may have to deal with many unexpected situations or circumstances that you otherwise wouldn’t have to worry too much about as a landlord. There’s the potential for you to have to be a lot more hands-on than you may have anticipated, especially if you have your rental property in a college town.
According to Ella James, a contributor to Landlordology.com, landlords to college students or young adults may have to handle problems such as property damage or other expensive repairs, noise complaints or other legal issues, drama among roommates, pet problems, and much more. Because these scenarios are real possibilities, James also advises landlords to require a substantial security deposit from tenants in order to protect you financially from anything that your less-than-reliable renters throw your way.
Know Your Audience
Although renting to young adults or college students can come with some potential disadvantages, it can also make some things easier on you as a landlord. Because these types of renters often don’t have too much life experience or too many expectations, supplying them with the most modern appliances or home furnishings isn’t usually necessary. In fact, many young people may even prefer to have older appliances and furnishings if it means that they don’t have to pay as much for rent. This could definitely save you some money. However, Gregory Lester, a contributor to TenantAltert.com, reminds landlords to make sure that they install quality yet sturdy flooring and other finishes in order to make it easy to clean, repair, or replace if damage does occur.
Because being a landlord to young adults or college students can be a real drain on your time and resources, many property owners choose to use property management services like us at Green Residential, in order to make the whole process a little easier on themselves. By choosing to work with a property management company like Green Residential for rental and leasing services, you can put tasks like tenant screenings, contract preparation, and even rent collecting on someone else’s plate, allowing you the freedom to spend your time chasing other pursuits.
If you’re interested in acquiring a slice of the college rental property market but don’t want to be heavily involved in the day-to-day dealings with tenants or renters, contact us at Green Residential today. We can help you to achieve your real estate investment goals while also providing you with the tools you need to find success as a landlord.