Renting to college students can be very profitable for landlords. There is a high demand for off-campus housing which drives up rents. What is more, you can often get more rental income than renting to typical non-student tenants. However, there is a catch. You need to have a lease designed for college students. Last week we wrote an article “What You Must Know When Leasing to College Students.” This week we are providing landlords with a list of the 10 essential lease terms for college students.
College Leases Should End in June
To maximize your cash flow, you need to have your units vacant during the time when students are looking for housing. The peak rental time is in June and July. By mid-august, almost all students will have secured housing.
Get a Co-Signer
Having a co-signer on the lease is important for two reasons. One, if the tenant is a minor then they cannot enter into a legally binding contract. Second, most college leases are paid by the parents. By putting the parents and the student on the lease, then both are responsible for the rent and the other terms of the contract.
Rent by the Bedroom
Sure Bunny and Bridget might start out as best friends, but they may also end up as enemies by the second semester. If both are on the same lease, you will have a problem. Instead, prepare a separate lease for each tenant based on the bedroom they will rent. The kitchen, bath, living room and other areas are considered common areas by the joint tenants.
Set a Maximum Occupancy
It is not uncommon for college students to sublet their space to friends in order to reduce the rent they pay. We have seen some two-bedroom apartments that are holding 6 to 8 college students. This will dramatically increase the wear and tear on your unit. Limit this by setting a maximum amount of residents that stay longer than 7 days.
Set Quiet Hours
We all know that college students party more than the rest of us. Setting clear quiet hours will help to limit that. If your municipality doesn’t have specified quiet hours, you can use the most typical hours of 10 p.m. to 7 a.m.
Make the Tenant Pay the Utilities
Young adults who have never lived away from mom and dad often have no clue how much it costs to leave the A/C unit on all day while they’re at class or how much the water bill adds up if you don’t fix a running toilet. Help teach them responsibility by making them pay the utilities.
Limit the Common Areas
You will be surprised by the “creative” areas your college tenants will hang out in. If you do not want them in the room or in the crawl space, then make sure that is in the lease agreement.
Ban All Weapons
While this seems obvious, you will want to make sure that the lease specifies that weapons include BB guns, paintball guns, rocket launchers, and any homemade projectiles.
Ban Flames of All Kinds
Rather than run the risk of your college tenant absentmindedly forgetting about the burning candle in the bathroom, simply ban all flames. This would include candles, fireworks, campfires, charcoal grills, cigarettes, lighters, and other similar items.
Lease Terms Should Include a Summary of Property Rules
Let’s face it, leases are intimidating. Do not count on your college tenant to keep reviewing their lease agreement. Instead, include a summary of all the property rules as part of the lease. Have them sign it and also post a copy on the inside of the front door as a reminder.
If you are not using a skilled property management agency, you will want to have your attorney draw up a lease agreement that is tailored to college students. Renting to college students is a great source of income, but if you want to keep your personal involvement to a minimum and provide extra protection for your investment, we recommend placing your property with an experienced property management team.