If your rental properties are located anywhere in or around a college campus, then this is a demographic (college students) that you must remain consistently informed about.
Cities like Austin, Texas have rental markets that are heavily influenced by the influx of new students every year. Knowing how the local rental market is affected by students and understanding how to take advantage of that type of a rental market can be one of the keys to becoming a successful landlord.
These are the five things successful landlords know about renting to college students:
1) Millions of College Students Live & Rent Off-Campus
Successful landlords know that according to the College Board, at least 44% of college students live off campus.
Why does that matter? Because that means there are millions of college students looking for off-campus rental properties all across the United States. That is something every landlord should be aware of.
2) Provide Specific Amenities Geared Towards College Students
Successful landlords know that in order to make their rentals attractive to this specific demographic, they need to provide specific amenities. You can read more about that in our blog post, "The 3 Amenities Millennials & Gen Z Expect in a Rental."
3) Guarantors and Co-Signers
Successful landlords know that many college students who live off campus tend to have financial backing. This is usually in the form of financial aid or a relative who is helping them through their college years. In my experience, payments from guarantors for college students were far more consistent and on time than most of my tenants.
Just remember to verify the guarantor's income prior to approval. This is a key step to ensure that your new college student renter will not default on their agreement. Because college students tend to be first-time renters or simply do not have much credit or rental history, a guarantor is generally the go-to solution to satisfy your rental criteria requirements.
Related: Establishing Tenant Policy: Automatization With Free Property Management Software, Accessibility
4) First-Time Renters
There is a reason that some properties charge higher deposits for first-time renters. If you are renting to college students, there's a good chance that they are a first-time renter.
Successful landlords know how to rent to first-time renters, and they tend to do the following:
- Charge a higher deposit to cover any unexpected losses, such as unreported issues that turn into damages later on.
- Provide a convenient platform that allows first-time tenants to submit maintenance requests in the simplest way possible.
- Provide a quick and convenient way for tenants to pay rent online from their mobile devices or wherever they have internet access. Automatic withdrawal is a fantastic option for many students!
- Frequently conduct property inspections to ensure basic maintenance items are being taken care of, such as: HVAC filters are clean, drains are cleared, dryer vents are cleaned out, etc.
Related: Top 8 Problems Tenants Face And How To Deal With Them
5) Roommates & Affordable Rentals near Colleges and Universities
Successful landlords know that even if a student has financial backing from a guarantor or financial aid, they are generally not trying to live in the most expensive rental in town. In fact, it's often quite the opposite. Usually they look for more economical rentals.
That being said, one of the quickest ways to make a rental affordable that is otherwise too expensive is to split the cost with someone else. Many college students will solve the unaffordability issue by having a roommate.
This can either be on a combined lease for the rental where all parties are responsible for the entire rent amount each month and divide it as they see fit, or it can be a separate lease where each party is responsible only for their individual rent each month. That way if one of them defaults, it only affects that individual.
Marketing your property as a rental that allows roommates - encourages it, even - is a great way to attract college student renters.
You can set yourself apart even further by offering a payment portal that allows roommates to split their rent so that they are each responsible for only their half. This can easily be done using TenantCloud's combined or separate invoicing system.
What are the benefits of roommates?
For one, rent is made more affordable by splitting the cost with another individual.
Second, you can increase the rent on your rental property, since it's being split.
While you may have only been able to charge $1,400 a month for a single person or family, you can now charge $800-$900 per student, for a total of $1,600-$1,800 per month, and it will still be cheaper than anything else of its kind on the market.
Now That You Know What They Know
Now that you know what successful landlords know about renting to college students, here's the question: Is targeting that demographic right for you?
Only you can answer that question, but there are pros and cons that need to be weighed:
The Bad & the Ugly
- Higher Turnover: There will generally be a higher turnover rate. College students get kicked out of school, transfer schools, finish school, leave school, graduate from school…and the list goes on. Turnover will be much higher than renting to a more traditional demographic.
- Renter Education: There will be more "renter education" involved, because students are usually first-time renters.
- Example 1: No, you cannot pay rent late because you are in Europe for a month. You will still be charged late fees.
- Example 2: No, you cannot invite twenty people over to the community pool.
- Example 3: ….. You get the idea.
- Dealing with Parents: You will more than likely have to deal with the parents more often than you deal with the actual college student. Sometimes this can test your patience, so you must be prepared and understand how to deal with out-of-state parents who think that your state's rental laws are the same as their state’s rental laws:
- Example 1: A parent from New York who is familiar with tenant-friendly NY rental laws is often in for quite a surprise when it comes to landlord-friendly rental laws in Texas.
- Higher Rent: Because college students tend to split rent with roommates, you can often charge higher rent while still remaining one of the most affordable options in the area.
- Reduced Vacancy: Because there is a constant need for off-campus living options, chances are that your rental will be leased year-round if you remain competitively priced and provide the necessary amenities and features that other rentals in the area offer. Spending a few extra dollars to set yourself apart from the crowd can go a long way toward attracting college renters.
- Word-of-Mouth Marketing: College students tend to know other college students, and they also tend to know high-school students who are going to be in college within a short period of time. They will often give soon-to-be college students insider information about the best rentals in the area, and that can be very powerful and free marketing for your property, if it's one that they recommend.
While there might be some crazy kids in the bunch, reckless behavior here and there, and a bit of immaturity and poor decision-making skills, for the most part college students are law-abiding citizens who are no different than any other tenants you may rent to.
There are good and bad tenants of all types, which is where tenant screening plays a major role in helping ensure you only rent out to the best of the best. You can learn more about that by reading our blog post, “The Complete Guide to Tenant Screening.”