If you live in a college town, you can make good money by providing housing facilities to college students. This is a lucrative business for all big cities, but people living near colleges can take advantage of it. The average cost of housing for each student is around $11,000 per year. This is for those students who attend public universities, but students in private schools pay even higher. If you have a house near a college, it can be a good and regular source of income for you. But you have to choose your tenants very carefully; every student is not a good renter. It would help if you screened all potential tenants. Once you get them, try to retain them too. It will secure your monthly income for a long time.
Screening of college students
It is a misconception that majority of the student live in dormitories. According to a survey, only 13% of students live on campus. The majority of the students feel comfortable living off-campus, which provides landlords an opportunity. House owners can keep these students as tenants and earn money.
Many landlords avoid dealing with college students as they think that students will not take care of their property. It is true but only in some cases. The majority of the students want a peaceful and economic place to live near their college. They keep their houses tidy and clean, and you can easily find such students. Following a few tips will help you to find the best available choice. Involve Cosigners: usually, tenants' credit history is used as a tool to check if they will pay the rent in time or not. But students have a very brief credit history, and they may have taken no loan yet, so the formula does not fit them. It would help if you involved a cosigner in that case. A guardian or parent with a good credit score can be used as security. It will reduce the chances of a missing payment, or you can contact his guardian.
Screen everyone: If a single student is taking your apartment for rent, but two or three people will live there together, you need to screen all of them. Do check the criminal background of all the tenants and make sure no one is involved in illegal activities.
Rental insurance: if your renter has insurance, it will reduce the risk of a lawsuit. Renter insurance covers the injury caused to any renter in the home and the damage caused to property. For instance, if the fire caused damage to the house renter knows insurance will cover his damages, so they will not disturb you for financial support.
Ask for references: You can ask students for references. It can be his boss, where they work part-time or his college teacher. However, present students' landlords cannot be a reliable reference, as they can recommend them to get rid of bad tenants.
Ask for a security deposit: When you choose college students as renters, ask for a security deposit. State laws determine the maximum limit you can ask for as a security deposit. Usually, a month's rent is taken as security to cover any damages. It will encourage students to keep the unit clean and in good condition.
Do not ignore Move-in inspections: when student tenets move in, inspect the house with them. Ask permission to check the unit randomly throughout the agreement period. Check unit before school break starts but don’t forget to send the checking notice.
You need to be careful about a few things; for instance, you cannot ask for the tenant's nationality, religion, and sexuality. So, it's better to avoid these topics.
Ways to retain good tenants
Once you successfully find good tenants, you should make efforts to retain them for long. It will ensure your financial security. According to statistics, tenant turnover can cost nearly $5000, which can be the amount spent on maintenance or advertisement. Loss of rent also contributes to this.
You cannot avoid turnover but can reduce the frequency. If you find good tenants, you should encourage them to rent your house for long. Here are a few ways to retain them.
Ensure early Renewals: If you want the students to stay longer, you can encourage them to renew the lease before it ends. You can offer some discount, like a discount on the first month's rent, after renewal. You can also offer incentives like up-gradation in apartments without charging extra money.
Multi-year lease: College students like multi-year leases, as it fixes the same rent for many years and doesn't have to pay for security deposits. You will get a constant source of income for many years.
Offer Free WI-Fi: The Internet is an important necessity for students. If you offer students high-speed internet for the rent of the house, they will be happy to rent your unit for a long. They will be free from installation and payment worries of a new internet connection.
Offer inclusive rent: students feel comfortable fixing an amount with them, including all monthly expenditures. It helps to manage the budget easily. So if you offer an inclusive rent, they will be ready to stay with you for long.
Individual leases are convenient: If you rent different bedrooms of your house, offer an individual lease for every renter. A collective lease can complicate situations sometimes, so keep it simple.
Install washer and dryer: you can increase the value of your unit by installing a washer and dryer. Students will take it as a luxury as it will save a lot of their time. This convenience will force them to stay in your unit for long.
When the academic year starts, the demand for housing unit increase; having students as renters can be a regular source of income. However, it would help if you did proper screening before choosing a renter. Ask for an appropriate security deposit and take the permission for random check-ins in advance. Student tenants prove to be good renters in the long run. They also save the loss you face due to turnover.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
