According to the National Center for Education Statistics (NCES), there are around 19.7 million college students in the U.S. as of 2020. So, it’s safe to say that there is a huge market for student housing. If you’re thinking of dipping your toes into this market, there are certain factors you should consider first.
Think back to when you went off for college. You’ll probably remember how hard it was to be on your own. After all, it was the first time that you entered the renting world. With that said, your potential student tenants will face the difficulties that you faced, too. In this article, you’ll find helpful tips from our professional property managers to help you rent your unit to student tenants.
What are the common problems with student tenants?
Of course, it wouldn’t be fair to label all students as bad tenants. Student tenants get a bad rep, but despite that, dealing with them is the same as dealing with any other tenant. However, that doesn’t mean that student tenants are saints. Below, you’ll find the common problems that property owners and property managers deal with when renting to student tenants:
#1 Late Rent Payments
Be prepared to be paid late, because student tenants often don’t have sufficient funds. Student tenants usually pay their rent through their student loans, but those are too small, considering the rising rental rates.
To reduce the potential of late rent, be sure to screen the potential student tenants. Make sure to check if they’re employed to ensure they can pay their rent on time. If they aren’t, they should have a guarantor or a co-signer that can cover the rent. You should also consider setting up a payment plan that suits your tenant’s situation.
#2 Property Damage
As we earlier mentioned, student tenants are on their own for the first time. Hence, they’ll probably fail to care for the rental property. That’s why you should always collect a security deposit to ensure that you can pay for repairs. Keep in mind that you can charge tenants for damages from the deposit. In other words, you can only use their deposit to pay for property damage due to negligence, not wear and tear.
After the tenancy, don’t forget to return the deposit in full if the property is in pristine condition, or in part if you plan to use it for repairs. You should also hire a South Florida property management company to help you document the process, so your tenant can’t claim that you charged them more than necessary.
#3 Noise and Nuisance
Student tenants tend to hold loud parties. Hence, it isn’t uncommon for neighbors to call you or your tenants to complain about the noise. When this happens, ask your neighbors to talk to the student tenants, and they’ll likely keep it down. If the nuisance continues, you need to contact the student tenants or escalate the matter to your property management company. A warning should be enough to get them to tone it down.
Another tip for dealing with student tenants is to note the time and date of the complaints. That way, if your tenants continue their conduct, you’ll have grounds to evict them.
#4 Ending the Contract Early
When a student tenant rents your property, chances are that they’re renting a room. So, when one student has to end the tenancy early, you probably won’t have a vacant unit. In this situation, the rest of the tenants will have to cover that tenant’s share of the rent. Depending on the lease agreement, you can also put the onus on your tenant to find a replacement. However, be sure to let the potential tenant go through your property management company’s screening process.
#5 Unusual Expectations
Sometimes, student tenants don’t understand the landlord-tenant relationship. This can lead to unrealistic demands, such as tenants telling their landlords to set up their Wi-Fi connection. As a landlord, you should treat student tenants like any other kind of tenant. Hence, you aren’t legally obligated to provide amenities that aren’t vital for their survival.
To prevent this, sit down with your tenants and explain what’s expected of them, and of you. Get rid of any confusion before they sign the lease agreement.
#6 Utility Bills
A lot of student tenants tend to forget that they have to pay for utilities. If you have an all-inclusive tenancy, you can cover the cost of utilities. This is favorable for your student tenant, as anyone would want to avoid the stress of setting up water, electricity, etc.
This translates to more duties, but you can easily handle them with the help of a property management firm. Of course, you don’t always have to cover their utilities, but remember that dealing with bills can be confusing for first-time tenants.
Should landlords hire a property management company?
Student tenants can be a handful. Attending to their needs and demands can be time-consuming, so consider hiring a property management company. This is especially true if your rental property is far from your residence, or if you can’t commit to the day-to-day demands of property management.
You can pass on the pressure of property management to your property manager. They’ll be responsible for finding good tenants and dealing with tenant-related disputes. In other words, they’ll deal with the admin so you can concentrate on other duties. Plus, if your property is in a college town, they’ll help you rent it out so you can prevent vacancies over the summer.
The Bottom Line
Landlords tend to say no to student tenants because of the bad reputation they’ve gotten over the years. But with a bit of careful planning, you can easily manage the problems that come with renting to students. So, if you’re lucky to have a market of student tenants, take advantage of it and don’t let the “horror stories” of renting to students scare you. You’ll be seeing dollar signs in no time.
A property management company such as Luxury Property Care can always help. We’ve served South Florida for over a decade, helping property investors properly manage their real estate investments, whether residential or commercial.
Call us at (561) 944 – 2992 today or complete our contact form. We’d love to tell you more about our services.