Property investments come in many sizes and forms, one of the more popular of which is college rental properties. Investors be warned - this is not a good fit for the passive investor. Investing in a property that will be rented to college students does have a little more work, often hands-on work, compared to stocks and bonds that are managed by your financial advisor. That is not to say that college rental is not a good investment opportunity. In fact, it is a great opportunity, and with more than 70 million students enrolling each year in the U.S., there are plenty of choices for how and where you invest.
Consider these pros and cons as part of your research into college rental property.
Pros of Renting to College Students
- Predictable Arrival of Tenants: The great thing about renting a property in college towns is that your target tenants are predictable (mostly). They arrive ready for the semester to start and then head off again when it is finished, if not stay for the summer.
- Rent Safety Net: Renting a shared property means that if one of your tenants is late with the rent, you won’t be completely out of pocket as you have the other tenants’ rent to fall back on. In addition to roommates, another safety net can be parents. “I always recommend getting a parent or guardian to co-sign the student’s lease. That way you have more of a guarantee that things will run smoothly,” advises, Sherry Ryan a real estate marketer at Essay Writer and Assignment Help.
- Location Choice: There are multiple locations to choose from, since the U.S. has more than 5,000 college towns.
- Easy Advertising: College Admin offices will often be able to recommend where best to advertise your property to students. There will also be bulletin boards around the college where you can put up ads, and social media is always a winner for getting in front of college students.
Cons of Renting To College Students
- Summer Dip In Tenants: During Summer, it is unusual for students from out of town to stick around, so they will often look for rental agreements specific to the college year. This can leave you with a drop in income. There are options though. You might list the property on Airbnb or advertise the property to visiting summer school students and lecturers.
- Student Behavior: It is hit or miss whether or not student tenants will respect the property they are renting. Be sure to screen potential tenants, check their references, and run landlord inspections regularly. Keep in mind, “it is rare to hear about students misbehaving on the scale that Hollywood movies would have us believe,” says, Ted Holmes a journalist at State Of Writing and Paper Fellows. “Most students now just want a quiet place to study and Wifi.”
- There Is Work Involved - For You: Landlords will need to be hands-on. Renting to students means regular check-ins, damage control, neighbor relations, and property maintenance. Alternatively, you can hire a property manager to take care of things on your behalf.
- Tenant Turnover: Students don’t often stay in the same property for more than one year, which means you could have to advertise every year. To encourage a good tenant to return, offer an incentive like a lump sum off their next year’s rent. You could also offer your tenants a cash reward tot find tenants for the following year.