The real estate market has many opportunities for investors. If you can target the right tenants, you can easily build a tidy nest egg. The key is to target a niche demographic – college and university students. Most landlords think twice about renting out their properties to students, as they worry about the place getting trashed during wild frat parties. However, this is not true. While there are a few risks renting out your property to students, it can turn out to be a lucrative business deal for you.
Typically, college and university students have to stay in dorms. However, they don’t get the privacy they need. And, renting a property is the perfect solution for them. If you understand the advantages and risks of renting to college students, as a real estate investor, you will be able to make an informed choice.
image by www.audio-luci-store.it
Here are some of the benefits of why you should be looking to rent your property to college students.
Huge Demand: With the economy not showing signs of full recovery, many people are going back to college to continue studies and improve their job prospects. These are students, who are slightly older than regular college students and are looking for a home away from home.
Great ROI: Most college students share a house and this helps them divide the rent. So, it is easier to find a group of students willing to rent a house than an individual or family who may not be willing to pay the rent you are expecting.
Secure Rent: Typically, students look at their parents to pay rent. So, as the property owner, you have peace of mind knowing your student tenants will pay rent every month and that too on time. Also, it is common for parents to pay the rent for the entire semester, so you get your rent in advance.
Cheaper Alternative: Housing within the campus often is more expensive and most students don’t want to spend that much money. An off-campus accommodation will suit the budget of the students and ensure your property always has tenants.
No Hassles: Unlike regular tenants, students are looking for a place where they can sleep, eat and study. They do not care about elaborate décor or high-tech appliances. This means you will be spending less money doing up the interiors and equipping your property.
Just like everything else in life, there is a flip side to renting your property to college students.
Short Duration to Rent Out: You will have just a short window to find college students and rent out your property. You will need to time your marketing efforts just when the semester starts and for some reason you miss this window, you may find it tough to find student tenants.
Short-Term Rental: Be prepared to have a high turnover, as the students will stay only till they finish their degrees. Also, you may be saddled with an empty property after the school year comes to an end.
High Maintenance: Most college students are leaving home for the first time and hence, not used to taking care of certain maintenance issues themselves and will be troubling you. Some may not even realize there are maintenance needs. This means you will have to pay a lot of attention to your property to maintain it in a good condition.
Rent Problems: If parents send money for the rent, there is a chance the students may spend it or even forget to pay you. You may have to deal with late rent payment, especially during breaks and holidays. You will have to remind them about paying rent before breaks and holidays which can be tedious.
Chance of Damage: As college students are still learning the ropes of being responsible, your property can get damage in a wild party. Or, the students may just not bother with treating the property well.
The good news is there are ways to reduce the risks you face if you rent out your property to college students.
You may even consider hiring third party monitors or real estate agents to take care of your property.
A property close to college can turn out to a lucrative revenue channels. If you manage to take care of the risks, you will certainly enjoy the profits.
Feel free to Subscribe to our PropertyCluster Blog to stay up to date with our latest posts and information on Real Estate Industry or you can Follow Us on Facebook, Twitter, Pinterest and Google Plus for regular updates.