Like many Austin suburbs, Georgetown is a college town. Home to Southwestern University, with its undergraduate population of about 1500 students, the area’s population naturally fluctuates with the school year. This year, though, the school year looks a bit different. Though Southwestern does plan to invite all students back to campus, it will be doing so on a shortened schedule, with students remaining at home after Thanksgiving break – and that’s if things go according to plan and the campus can safely remain open for the intended period.
What do all these changes mean for local landlords who typically rent to students? To say it’s complicated would be to understate the situation, but regardless of anyone’s beliefs about the school’s reopening plan, it puts landlords in a challenging position. Students and their families will likely be hesitant to sign full- or academic-year leases on local housing that they won’t be around to use for a large chunk of the time, and which may be unnecessary if the campus closes. Instead, they’ll likely be looking for more flexible options, leaving many Georgetown landlords considering whether they should open short-term lease agreements to college students.
Shifting The Short-Term Market
Typically, when a landlord positions their property as a short-term rental, it’s because they are renting it to visitors attending an event, or – as is common in Texas, to “snow birds,” those older adults from colder climes who spend their winters in the South. Such a target audience is reflected in the marketing strategy: promote the regional attractions, not the day-to-day functions. But such an approach won’t work with students returning to the area for classes.
Instead of focusing on attractions, landlords considering opening short-term rentals to students will want to emphasize elements like ease of access to campus, kitchen and work spaces, and proximity to grocery stores and pharmacies. Given that so many things are still closed, any benefits the actual residence has to offer are unusually important.
A Matter Of Responsibility
Landlords are historically hesitant to rent to college students because many aren’t ready to take on the responsibility of caring for a property, and shortening the rental period can potentially make the situation worse. There are ways to screen for such factors, though, and to add some security to the agreement. For example, short-term rentals might be restricted to upper-level students who have prior leasing experience and who can offer previous landlord references.
Adding a cosigner to the lease agreement is also a good idea when working with undergraduates, and can also be helpful in the event of an emergency situation. While you should always deal directly with your tenants when possible, many college students don’t actively handle their own living and travel arrangements. As such, if a student is suddenly leaving a property because of campus closures, for example, there’s a good chance their parents are arranging their travel.
The bottom line: when screening student tenants, be open to the different shapes these arrangements might take. Ask directly who is responsible for paying the rent and who will communicate with you about any changes to the lease. While shifting responsibility to a parent cosigner might be an alarm bell under ordinary circumstances, these are unprecedented times.
How Short Is Short-Term?
In the age of AirBnB and VRBO, short-term leases can mean anything from a few days (essentially a brief AirBnB booking) to a few months, but how long should student rentals be? Unfortunately, there are no guarantees that students will stay for the full three months of in-person courses, despite the current schedule, so your best option is to lease properties month-to-month. While still imperfect – what happens if campus closes a few days into a new month? It’s reasonable to expect monthly commitments.
The fact is, the ongoing pandemic has completely changed the norms of off-campus student housing, whether a property is specifically marketed to students or not. Some tenants – or at least their parents – may ask that rent be prorated based on actual time in residence in the event of pandemic-related closures, and only you can make that decision, and it should be laid out in the lease.
Will There Be Demand?
Offering students short-term leases for the fall semester could help landlords compete for business, but some are wondering whether there will even be a student population to compete for. A sizable number of students who wouldn’t otherwise consider it are taking a gap year or gap semester in order to stay off campus in the fall, and to avoid hybrid educational arrangements. That could drive housing demand down, or with worry about virus spread in student housing, more students may choose to live off campus. Such uncertainty means it’s hard for landlords to predict demand and to make advance decisions about their properties.
Alternative Market Opportunities
If you’re hesitant to offer short-term rentals to Georgetown’s student population, you might also consider marketing your property to those students who don’t plan to leave the area in the event of a closure. This might include some international students, as well as students who have local jobs.
As some landlords with a history of renting to students have pointed out, unlike student housing, they actually have an advantage – their properties don’t just suddenly close down – evicting students who may have nowhere to go or who can’t currently get home. Students who are looking for a little more stability in their housing, then, may be interested in an option that allows them to stay in the area, regardless of the school’s decisions.
Navigating A Changing Markets
With so much uncertainty at play as students enter the fall semester, it’s no surprise that landlords in college towns are also feeling a good deal of anxiety. Nothing has prepared you – or anyone else, for that matter – to handle these new market conditions. Luckily, you don’t have to do it alone.
If you’ve historically rented to college students and you’re concerned about what that will look like in the fall, you need the Green Residential team in your corner. A full-service property management company, we’re happy to help you and your tenants navigate this uncertain rental market. Contact us today to learn more about our services. With over 40 years of property management experience, your Georgetown property is in good hands with Green Residential.