Do you own an investment property that’s located in the general vicinity of a college?
Whether you own a home in Gainesville, FL that’s just steps from the University of Florida or an apartment in Austin, Texas that’s right down the street from the University of Texas, you should consider renting to college students if you’re not already.
Before you allow college students to move into your home or apartment, though, you should also take the time to consider the pros and cons of doing it. Renting to college students tends to be a little bit different than renting to those in other stages of their lives.
Here are some of the pros and cons of renting your investment property out to college kids.
Pro: You’ll Always Have a Steady Stream of Potential Tenants
Studies have shown that a large percentage of college students choose to live on campus when they go away to school. About 40% of those who attend a public college and about 65% of those who attend a private college live on campus.
But there are also a lot of college students who move off-campus at some point in their college careers. Studies suggest that roughly 40% of public school students and 20% of private school students opt to live in off-campus housing.
This will be great news for you if you own an investment property near a college. It’ll mean there will always be students looking for a place to live off-campus. You shouldn’t have any problem finding tenants when you accept college students.
Con: You Might Encounter Issues If You Have to Evict Tenants During the School Year
A lot of college students hold down jobs these days while they’re attending school. In fact, one study found that upwards of 70% of college students work at least part-time during the school year.
If you rent your investment property to college students with jobs, they shouldn’t have any trouble paying their rent on time. But you could run into issues if you rent your property out to tenants who don’t stay on top of making their monthly rent payments for one reason or another.
In the event that you have to evict college students for failing to pay rent, it could be difficult to find renters to take their place, especially if the eviction occurs right in the middle of the school year. You might have to allow your property to sit empty for a few months before the start of a new semester brings new potential tenants in.
Pro: You Can Often Charge Higher Rents to College Students
Since the demand for rental properties near college campuses is often high, you should be able to charge higher rents when renting to college students than you would be able to otherwise.
If your property is situated in an ideal location or if it’s a lot nicer than other properties in your area, college students will jump at the chance to rent it—even if it means paying a little extra for it. That will allow you to generate more income from your property over the course of a year.
Con: You’ll Need to Be Concerned About College Students Damaging Your Property
Some college students try to offset the higher rents they agree to pay by cramming a bunch of people into one house or apartment. They’ll fill every bedroom with at least one or two people. They’ll also find ways to convert other rooms in your property into sleeping quarters for additional roommates.
This can prove to be problematic for you. The more people that are living in your property, the higher the chances of damage being done to it during the school year.
You should tell college students that they’re only allowed to have a certain number of people living in your property at once. You should also check to see that they’re following this rule.
Pro: You Won’t Have to Worry Too Much About Updating Your Property
Most college students haven’t lived on their own before. As a result, they don’t usually have the high expectations that other people will have when renting a home.
College students are often just happy to have a place to call their own. It doesn’t matter if it has hardwood floors throughout it or a kitchen with stainless steel appliances.
That doesn’t mean you won’t have to worry about updating it at all. But you can usually get away with going for long stretches of time between updates.
Con: You Might Lose Money on Your Property When School Isn’t in Session
As we mentioned earlier, you can usually charge college students higher rents than you would other people. But unfortunately, there is a chance that renting to college students could cause you to lose money during some months.
The typical college school year runs from early September through early May. That is when college students would need to rent your property from you.
But once May rolls around, most college students move back home for the summer and don’t need a place to live. It could make it difficult for you to generate income from the middle of May up through the start of the new school year in September.
Depending on where your investment property is located, you might be able to find someone to rent it out for the summer. But you also might be forced to bite the bullet and leave your property empty in the summertime, thus missing out on the chance to bring in income with it.
So, Is Renting to College Students Right for You?
Renting to college students isn’t for everyone. There are some landlords who don’t have the time or the patience to deal with college kids all the time.
But if you’re up for the challenge, there is some good money to be made by renting to college students. As long as you know what you’re getting yourself into, it could be a great financial decision on your part.
Check out our blog for more information on making the most of rental properties.