Students from out of town need somewhere to live and if your property is in a University/College town you have an opportunity to fill a student rental property. No doubt you have heard horror stories about wild college house parties, noise complaints and property damage. The irony is that most students are reliable and trustworthy tenants and should be considered a viable source of income. There are, however, some key considerations to be made before renting your property to students.
Top 4 Tips about Student Rental Property
Choose the Right Property. The term “location, location, location” applies here. Typically, students want to be within walking distance from the school or at a minimum, near public transportation that will get them to school easily so choose property as near to campus as possible. The number of rooms in the property is also important; many students choose to rent in groups so a property with four or five bedrooms will be most appealing and often yield the highest return on your investment.
Find sturdy furnishings. If you are supplying a furnished home, you may want to consider spending a little more up front to provide sturdy furnishings that will withstand use by students and their friends. Cheap furnishings won’t last and will cause you to re-invest over and over again.
Understand the Law. Read up on the laws around student rentals. For example, are there restrictions on the number of people who can live under one roof? Do you require a license? Should you be accredited by the University?
Don’t Expect a Big Capital Gain. Student properties rise in value more slowly than other property types so if you are intent on large capital appreciation, renting to students may not be the best option for you.
Top 7 tips for Renting to Students
Get a Referral. Provide yourself a safety net by only taking students that have been recommended by their college, creditors or employers or those that have a good rental history or other character references.
Require a Guarantor. Most students will not have a steady income or long rental history so it is in your interest to ask for a guarantor to accept financial and legal responsibility for the tenant. Guarantors are usually parents or guardians, and are subject to credit checks. The guarantor is liable for unpaid rent.
Protect your Property. Although it may be unfounded, students don’t come with the best reputation for caring for property. You can help protect your property by requesting a damage deposit and taking a complete written and pictorial inventory of the condition of walls, flooring, windows, cupboards, etc. The inventory should be approved by both landlord and tenant and both parties should retain copies of the list and pictures to protect themselves in the event of a dispute.
Provide an Information Packet. Before tenants move in, make sure that they have all the information they need to look after the property including garbage and recycling bins and pick-up days, local amenities and detailing their responsibilities regarding noise, recycling, care of the property etc.
You should also make sure that important items such as fuse boxes and the hot water heater are properly labeled. Clear instructions should be provided on “shutting things down” when students leave for breaks during their lease term.
Sign a Comprehensive Lease. Among other things, the lease should include a clause stating that if one tenant leaves, it is up to the others to find a replacement or they have to meet the total costs of the tenancy.
Student tenants can be a great way of generating regular income from your property. As long as you are properly prepared, your tenancies should go off without a hitch. Click here to view a list of property rentals by Son-Rise Property Management.