Planning on renting out your property to students? If your rental property is near a college campus, renting to students can be financially rewarding. However, that doesn’t mean it does not come with risks and responsibilities.
In this article, we’ll discuss the advantages and disadvantages of renting to students. We’ll also go over your legal obligations as a landlord.
Who are considered “student tenants”?
Student tenants are tenants that are currently enrolled in university, college, or any other higher education program. They’re typically in the 18 to 25 age range, however, they may be older if they’re attending post-graduate or specialty programs. The majority of student tenants are single, but some of them live with roommates to reduce the cost of rent.
What are the pros and cons of renting to student tenants?
Renting to student tenants comes with risks but it also comes with rewards. Student tenants require a different setup than others because of their lack of income and experience. However, renting to student tenants can be beneficial if your rental property is in a college town, such as Clearwater and Boca Raton.
Pros of Renting to Student Tenants
#1 Steady Demand for Housing
Students attend school year-round, which means that the demand for housing will always be high. If your rental property is located near an educational institution, you’ll be able to rent out your multi-family property to students, professors, and staff. With fewer vacancies, you’ll have a steady source of income.
#2 Competitive Rental Prices
Due to the demand, rental properties in college towns are typically higher-priced than rentals in the city. This means you can charge more as long as the rate is justified. Be sure to set a rate that’s still affordable for students.
#3 Fewer Demands
Student tenants aren’t looking for sleek interiors and smart kitchen appliances. They’re looking for a place to stay for the semester and nothing more. They’re less likely to demand upgrades, which means you’ll only have to worry about routine maintenance and repairs.
#4 Less Marketing Expenses
You don’t have to aggressively market your rental to attract student tenants. College towns have an abundance of shops, bars, and restaurants that students frequent. If your rental is near these areas, a large pool of prospective tenants will want to rent your property. Plus, if a tenant moves out, they’ll likely tell their friends about the vacancy. Word-of-mouth is all you need.
#5 Advance Payments
Some student renters will pay their rent in advance because their parents are the ones paying for it. That said, you won’t have to worry about late rental payments. In addition, student tenants may rely on their scholarship money to cover their expenses.
Cons of Renting to Student Tenants
#1 High Turnover Rate
Student tenants aren’t likely to renew their lease. It’s possible that they can no longer afford the rent, or that their preferences have changed. Some students might choose to live on campus to save money, while others might study abroad.
#2 Summer Vacancies
Summer is the worst season for landlords that are renting to students. Filling vacancies can be difficult since students typically travel, go home, or get internships over the summer. That’s why many landlords hire a short-term rental property management company to help fill the vacancies.
#3 Higher Risk of Property Damage
This is likely their first time living on their own. Hence, you can’t expect them to stay on top of regular maintenance. They’ll put off their responsibilities such as throwing out the trash or mowing the lawn. Student tenants also tend to throw parties that might damage your property.
What are the landlord’s obligations to student tenants?
The landlord’s obligations to student tenants are essentially the same as their obligations to any other renter.
#1 Fire Safety
By law, you are required to ensure that your rental property is free from fire hazards. First, there should be at least one smoke detector on every floor. Second, if the room or home has a fireplace or gas-burning stove, there should be a carbon monoxide detector nearby.
Be sure to check these alarms regularly. It’s your responsibility to ensure that they’re in good working order. If you’ve hired a property manager, ask them about other health and safety standards that you may need to comply with.
#2 Pest Control
Pest control is your responsibility if the infestation was caused by your failure to resolve the issue before the tenancy. For instance, if there were holes in the walls that you missed repairing, your tenant can hold you accountable. However, if the tenant’s negligence caused the infestation (e.g. leaving food out), it’s their problem.
You are responsible for major repairs, such as faults involving the structure of the property, plumbing, wiring, heating and cooling systems, and so on. Minor repairs are on the tenant, such as changing the lightbulb and heating filters. Essentially, you’re only obligated to ensure that the rental property is in habitable condition.
Can a landlord refuse to rent to student tenants?
The short answer is no. Under the Fair Housing Act (FHA), refusing to rent to students is considered discriminatory. The FHA prohibits property owners from denying accommodation to a protected class. Hence, you must avoid stereotyping student tenants due to factors such as their age.
All student tenants must undergo a screening process. If they do not meet your criteria, you must state the legal reasons to justify the denial of their application. Also, do your research on your city’s housing ordinances to make sure you comply with state and local laws. Your property management firm’s in-house attorney may be able to help you with this.
Can a landlord evict a student tenant?
Yes, but the eviction must be justified. Here are several situations where a landlord may evict a student tenant:
- The tenant is two months late on rent
- The tenant breached the terms of the lease agreement
- The tenant rented out a room to a subtenant without permission
- The tenant used the property for illegal purposes
It’s worth mentioning that you can’t kick a tenant out of the house whenever you want to. You will need to follow proper procedures, starting with sending an eviction notice.
Need help managing your student housing?
Investment properties in college towns are profitable, but that doesn’t mean you can earn passive income by being passive. Remember, your responsibilities to student tenants are the same as your responsibilities to other tenants. That means you still need to stay on top of maintenance, repairs, and so on.
With Luxury Property Care, you can leave the heavy-lifting to us. We’ll make sure that your student tenants are managed properly, and that your rental is regularly maintained.