Is your rental property located in a college town? If so, you may be considering opening up your rental units to students who attend classes at the neighboring college or university. If you have doubts about renting to a less mature group, be sure to know the perks that you may be missing out on if you pass up this opportunity. Is renting to college students in your best financial interest?
College students often come with a bad rap, but there are some key factors that may balance out the risk of renting to this group. Read on to find out what college renters are looking for and whether this rental relationship may be advantageous or conversely, disastrous for your and your property.
What College Age Students Are Looking for in a Rental
According to the College Board, 44% of college students live off campus. That translates into millions of students looking for housing each and every year. In the college saturated region of New England, college towns dot the map from Maine to Connecticut and can provide a huge chunk of revenue for small towns and big cities alike.
College students are often looking to live off campus in residential housing in later years of college in order to spread their wings and potentially save a little bit on room and board costs. They search for characteristics such as:
- Proximity to campus
- Proximity to public transit
- Security of the neighborhood
- Laundry facilities
- Access to Wi-Fi
Benefits to Renting To College-Aged Students
Given the list above, the property’s location, and amenities granted by your rental unit(s), you may be in a position to benefit by opening up your rental agreements to college students attending school nearby.
To start with, the demand and stability of rentals in college towns or cities is constantly high. The turnover every year and the fresh load of students means you will rarely have a vacancy. With thousands of students on the hunt for vacancies you will be able to fill your rentals easily every year.
Higher Rent Yield
The housing market is all about supply and demand. With the demand for college town rentals incredibly high, owners or property managers can generate higher cash flow than traditional investment properties. According to Fortune Builders, an average house near a college town can yield 30-40% higher rents than the same house five miles away.
Lower Marketing Costs
Renting an apartment or multiple units in some areas can be costly. Advertising in newspapers and online can add up to a significant cost depending upon your turnover rate. With college students competing for rental, you will not need to invest as much in your advertising budget.
Risks of Renting To College Students
The risks or disadvantages to renting to students that are less mature run the gamut from being late with payments to noise complaints. Here are a few things to take into consideration when weighing the pros and cons of renting to this group.
- Increased risk of damage that will need repairs.
- No rental or credit history to access prior to approving a rental agreement.
- Potential noise complaints.
- Potential late or missed payments.
- Frequent turnover at the end of each school year.
- Potential local regulations.
Deciding to rent to college students can be a complex one. Be sure to do your due diligence as to looking into local regulations as well as those required by the neighboring schools. In the end, do your research and plan knowing the best and the worst of what it could be like when opening your units to college-aged students.