Renting to College Students: Benefits and DisadvantagesWritten By: mcsherryproper on February 21, 2021
In the US, 55% of college students live in on-off campus rental housing. This segment comprises a bigger chunk compared to those who live in on-campus accommodations. College students also account for 12% of the total rental unit occupancies in the country in 2020.
The Fair Housing Act indicates that for the most part, you can’t refuse to rent to people just because they’re college students. Some states also have very specific laws that can get landlords fined if they decide to decline a renter based on arbitrary characteristics.
But should you open your 2-bedroom house for rent or any of your residential properties in Philadelphia to college students?
Pros of Renting to College Students
There will always be demand.
Let’s face it – if your rental units are near colleges and universities, there will be students looking for a place to rent. When a market is this competitive, the vacancy rate is low, and the demand will always be high. There may be small lulls throughout the year, but not so much that your rental units will be in peril. College towns almost always enjoy a consistently high demand for housing because of many students who commute to school daily.
There is a potential for higher profit.
Generally speaking, rental units in a prime location near universities tend to fetch up to 40% more profit than rental units from the schools. If your rental property in Philadelphia is in the right area, you can demand higher rental prices as the demand is higher for more convenient rental housing units. Another advantage here is you will spend less money on marketing because of the high demand. People will seek out their rental properties.
You will save on fancy upgrades.
While you still have to provide sturdy housing, efficient heating, and other essentials of a good rental unit, college students typically need a place to sleep and study. What does this mean for the landlord? This means you won’t have to focus so much on fancy upgrades while maintaining fairly good rental prices due to the demand for convenient student housing.
Just think of all the money you will save by avoiding fairly expensive upgrades like stainless steel appliances. Students only typically stay for a few semesters, so if anything, you can make the bedroom and living room as cozy as possible because that’s where college students will be spending most of their time.
Cons of Renting to College Students
It’s a challenge to screen college students.
College students typically don’t have a lot of rental history yet. Some haven’t been formally employed in their lives, especially if they come from higher-income families where well-meaning parents send their kids to college. It’s not uncommon to encounter a first-time renter with zero rental histories. This can be problematic to landlords that don’t have any data to base their decision on whether or not to accept the tenant or not. Standard criteria for screening tenants won’t apply to college students in this case (e.g., asking for paystubs).
There is the possibility of property damage.
College students generally do not have the maturity or knowledge to maintain an entire house. Having three or four college students in the same house might not help if none of them are used to living independently without their parents telling them what to do.
Landlords who rent out to college students will eventually have to face maintenance issues, especially when college students start having friends over for impromptu parties. Loud and destructive parties do happen, but not always. Some college students want to unwind and relax in another place. However, booze adds a new dimension to the equation. What if one or more tenants make immature choices that result in property damage? Holes in the wall can result from horseplay. Doors can get jammed if misused. Plumbing can go out the window when stuff like baby wipes are flushed. The only way to avoid these scenarios is to enforce the rental agreement and be proactive in reminding tenants what they can/cannot do so that you can protect their property.
Higher frequency of turnovers.
In an ideal world, a college renter would stay in just one rental unit for his studies’ duration. The reality, however, is that college renters tend to jump from one place to another. Rarely do students sign up for a rental agreement over twelve months. Circumstances change, and along with life changes come changes in housing plans. Some may decide to stop schooling for a while and work in their hometown instead. Others may switch to on-campus housing so they won’t have to commute anymore.
The summer months are also problematic for landlords because college students tend to move out during these months. Some go back home when the semester ends.
Like what we discussed earlier, not all college students are bad. Many are just loud. This can cause problems when nearby neighbors don’t want to hear anything past 7 PM. If you’re renting out a house to six college students who are in their prime, you’re going to have to deal with some excess noise on some days. Other days they’re going to be exhausted. They’ll sleep the entire day. But when they’re having fun, they will produce noise, and you may have to deal with noise complaints.
The landlord will have to enforce a stricter guest policy. Install some security cameras to see if the tenants are respecting the agreement. A custom agreement will prevent tenants from performing antics that can be disruptive or downright dangerous, like jumping off the balcony or shooting each other with BB guns or paintball guns. Sure, they can do all these things at home. But your rental unit is not really ‘their home’ in that sense, so they have to comply with your rules for the sake of everyone else in the neighborhood.