College classes will soon start. Landlords, do you rent to college students? If not, then you are missing a great source of income. If you are renting to college students, do you know how to market to them? Their situation is quite different than a normal tenant with a couple of kids. This article is going to show you what you must know when leasing to college students.
Properties that Appeal to College Students
This article is going to focus on leasing to college students in the Wilmington and Raleigh, North Carolina area. If you own a rental property that is in close proximity to these colleges, you should consider renting to college students:
- University of North Carolina
- Cape Fear Community College
- College of Wilmington
- Miller-Motte College-Wilmington
- North Carolina State University
- Wake Technical Community College
- Shaw University
- Meredith College
- William Peace University
- Miller-Motte College – Raleigh
- Miller-Motte College – Cary
- Augustine’s College
- ITT Technical Institute Cary
- University of Phoenix – Raleigh Campus
College student not only want to be close to the campus, but they want to be near city amenities including grocery stores, restaurants, sports clubs, coffee shops and parks. Many students do not own a vehicle, so rental properties that are close to public transportation are in high demand.
As a landlord, you do not have to be overly concerned about the condition of the unit. Most students are just happy to be on their own and off campus. They do not expect to have new appliances or trendy features. Laundry facilities are on the top of the want list. When remodeling a unit, focus on keeping it modern and easy to clean. Installing a large fridge will appeal to tenants that are sharing space with others. Your property manager should be able to tell you if you should rent out furnished units.
Leasing to College Students is Different
Typically, rentals are leased on a whole unit basis. You have a two bedroom apartment and you rent out the whole apartment to a tenant for $800 a month. Renting to college students gives you an opportunity to earn extra income on that very same rental. With college students, you can rent out your properties by the bedroom. The lease states which bedroom they rent and that they have access to the common areas of the house such as the kitchen, bathroom, living room, etc. This means that you could reasonably rent out the bedroom for say $450 or $500 per month and gain a little extra income. Some college students will even share a bedroom to keep rent down. By having individual leases for each tenant, if one misbehaves you can evict that one tenant without re-writing the leases for everyone.
One good thing about renting to college students is that more often than not, the rent is paid by the parents. Many parents are even willing to pay for a term upfront to save the hassle of making monthly payments. Just make sure the lease is co-signed by whomever is paying the rent. You will also want to include clauses on noise, maximum occupancy, sub-leases and damages or repairs. The tenants should be responsible for paying the utilities.
The College Rental Season
If you want to rent to college students, then you need to know the rental season. College rentals are snapped up early in the summer season. You want to have the leases end in June but no later than July 31st – even if that means the lease will be less than a year. By mid-august, almost all students will have secured housing.
Renting to college students often produces the maximum income stream possible for a rental. While there are some risks, these can be minimized by a very specific lease agreement, co-signing by a parent, and timing the lease to work with the college rental season. Hiring an experienced property manager is another way to reduce your hands-on management, but maximize the income while protecting your investment.
In the next article in this series, we will discuss in detail what specific terms you should put in a lease agreement for college students.