Pros and Cons of Renting to College Students

If you have a rental property in college towns or areas near major universities, renting to college students can be a lucrative move for you. As several college students search for off-campus housing, rental demand stays high, and it can be a great source of rental income. However, you must consider both advantages and challenges before you let your rental property to students.

As a property owner or manager, it’s crucial to understand how student rental properties fit within your long-term rental strategy and whether the benefits outweigh the risks.

So, in this article, I’ll break down the pros and cons of renting to college students, and provide insights into tenant behavior, leasing practices, and property management considerations with my over 20+ years of experience in real estate. Whether you’re located near a campus or thinking about expanding into this niche, this article will help you make informed decisions and maximize your rental income while minimizing potential risks.

Understanding College Students as Tenants

Before diving further into the topic, let’s try to understand college students’ demographics and how it has evolved.

When you think of college students, you picture someone with the characteristics of a traditional college student like:

• age range between (18 – 24);
• emphasis on studies and intense academic demands, such as during exams or project submissions;
• financial restraints impacting their ability to pay rent promptly;
• emphasis on social factors like opportunities to socialize and engage in extra curriculums.

However, college student’s demographics have changed a lot over the years. These days, more non-traditional students are enrolling in higher education programs. They are financially independent, are over 30, and are working part-time on college breaks.

A study by the Lumina Foundation shows that 34% of college students are age 25 or older, 80% of them work, and 44% of them are financially independent. These students do not fall under the traditional category.

Also, colleges and universities across the U.S. have been prioritizing diversity and inclusion efforts, and are creating campuses that reflect a broader range of backgrounds, ages, and life experiences. Naturally, this diversity also shows up in the types of renters landlords and property managers interact with in the student rental market.

Adding to that, international students seeking higher education in different countries are also growing. These students often have unique needs, from cultural support to specific housing accommodations, and they play a big role in shaping the demand for off-campus rentals and university-affiliated housing options.

Renting to College Students: Pros and Cons

As with any rental market, there are advantages and disadvantages of renting to college students. As a landlord, you must consider these factors before choosing college/university students as your tenants to maximize the benefits and minimize the challenges.

Pros of Renting to College Students

• Easy screening: Tenant screening process for college students becomes easy with their GPA and SAT scores information than screening someone without employment verification or rental history.
• High Demand: Student rentals have very high demand near college or university areas. With each new academic year, there is a consistent flow of students looking for housing or accommodation. It will give you more negotiating power.
• Higher Rents: College students often prefer shared accommodations. This allows you to charge higher rent for your rental property.
• Low Expectations: Usually college students do not have many expectations, they do not look for fancy units with modern appliances or lavish furnishing. They are just concerned about the place to sleep and study.
• Predictable Tenancy: College students as tenants are more predictable. You can generally predict when they will move in and out because of college cyclical semesters.
• Parental Guarantee: Most parents act as a co-signer or guarantor for their children. So, you can have a peace of mind.

Cons of renting to college students

• No Rental or Credit History: Most college students do not have a credit score or rental history because it’s not uncommon that they are renting for the first time. It could give you a headache while deciding whether they are worth of renting.
• High Turnover Rate: You could face high tenant turnover if you rent to college students because they do not sign a lease for longer than a year. But the good thing is this issue can be balanced by high demand.
• Property Damages: As college students are young and inexperienced, they are very likely to make mistakes in the form of property damage like an increase in normal wear and tear, and lack of maintenance.
• Noise-Related Issues: College students may have a more active social life, frequently inviting friends and conducting parties. This can lead to noise-related issues and complaints from neighbors.
• Poor Money Management: College students are young and inexperienced so they don’t know how to manage money properly as they often prefer to socialize (like nights out and parties), which quickly empties their wallet or bank account. Thus, they often fall behind on their rent.
• Local Regulations: Some states have local zoning laws that require landlords to submit prior notice to the local authority to get permission to rent to college students. It is a safety regulation designed to manage safety, noise levels, and population density in high occupancy areas.

Steps to Mitigate Risk for Renting to Students

Renting to college students might have risks or headaches for a landlord. So, it’s important to follow smart strategies to minimize the potential risks. You can coordinate with University Housing Departments, which provide guidelines for student rentals, off-campus housing support, or referral programs. These departments can be great partners for landlords like you looking to stay compliant and attract responsible student renters.

Here are a few things to mitigate the risks and find responsible tenants for your rental unit:

• Screen Tenants Carefully: Students are first-timers and need roommates to share fair rent per person. Thus, you need to check each of their backgrounds from their references such as professors and employers and let each of them sign the lease.
• Requirement of Co-signers: As college students do not have a credit and rental history, you must ask for a co-signer or guarantor in order to get relief from future trouble like falling behind on rent and normal wear and tear.
• Specific Clauses: You should be very specific on your lease clauses like noise levels, guest visits policy, pets policy, and maintenance. And you can also include the strict late payment policy.
• Periodic or Regular Inspections: Periodic or regular property inspections are very essential as they help you keep tabs on your property. It helps you to identify property damages and other problems, and solve those issues early.
• Security Deposit: Some college students might be notorious which will lead to property damages like normal wear and tear and other problems. So, always ask for a security deposit while signing a lease agreement which will help to cover unpaid rent or maintenance fees.

What Amenities College Students Look For?

Understanding college students is very simple, they do not have many expectations while renting. They just look for a few amenities on their rental. So, if you can satisfy their housing requirements, you can attract responsible student renters looking to live off-campus.

Here are a few key amenities, they look for:

• Proximity to College: This is the top priority for the students while looking for a rental. As they often spend their time on studies, part-time jobs, and social gatherings or extracurricular activities, they try to find accommodation in their college town.
• Wifi Speed: College students heavily rely on the internet for their studies like research, online classes, submitting assignments, and social media for entertainment.
• Affordability: As college students do not have much money, they often look for affordable housings and roommates to share the rent. So, you need to set your rental unit at a fair market price affordable to student renters.
• Laundry Facilities: Most college students are often busy with their studies, academic research, and social gatherings. They always look for laundry facilities on their rental.
• Safety: While College students do not have much experience in life, they always look for safe neighborhoods and safe rentals with security features like security cameras, and deadbolt locks to feel safe.

Can Landlords Refuse to Rent to College Students?

As a landlord, you need to understand college student’s demographics and you can not refuse to rent your rental units to college students based on their age and identity as students.

The Fair Housing Law clearly states you can not discriminate the tenants based on their race, age, color, nationality, gender, and so on. Thus Fair Housing Law prevents landlords from denying renting rooms to college students.

Final Thoughts: Renting to College Students

Renting to college students can be a smart and profitable move. But it’s not without any challenges. You need to understand their unique requirements and plan for risks such as frequent turnover, potential property wear and tear, and the need for clear lease agreements.

At the end of the day, it comes down to how prepared and flexible you are as a landlord. If you’re willing to set firm boundaries, maintain the property regularly, and understand the local regulations, especially zoning and occupancy rules, you can turn student housing into a profitable and consistent revenue stream.

And if you’re not sure where to start, or need help managing your student rental, that’s where we come in. At OKC Home Realty Services, we help landlords like you manage your rental property and grow your rental business. Contact us today to get the best student tenants for your rentals and prevent yourself from potential risks.

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