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Precautions to Take When Renting to Students

Friday, February 01

 When you own a rental property, choosing to lease to college students can be highly profitable. Effectively, you can set your rental prices by the room rather than by the property and generate more rent. However, it does of course come with some risks. You should take precautions if this is a path that you plan on heading down.


Precautions to Take When Renting to Students


  1. Make sure that the lease is specific – it is essential that you focus on making the lease as specific as possible when renting a space to multiple students. You have the option of creating one lease for the whole household. However, you then need to be sure that the lease dictates who is financially responsible if the terms of the lease are not upheld (this could be one of the tenants, or all of them jointly). Another option is to create individual leases. Be specific about the room in the house that will belong to each individual tenant. They are then responsible for damages to their own room and common spaces, but not for other bedrooms. You should also dictate what tenants can and cannot do with regards to painting and decorating, and the policy regarding subletting. These are things renting students might abuse if the rules aren’t clear.

  2. Consider a larger security deposit – there are legal guidelines in place that dictate security deposit maximums. However, you might consider requesting a more substantial security deposit than you would typically collect. This is important if you’re worried about students damaging the property or failing to pay their rent. (For more on security deposits in general, check out this post.)

  3. Ask for co-signatures from parents – it’s normal to worry about whether students are responsible enough to maintain a home and take care of their finances. It is not at all unreasonable for you to ask for student’s parents to sign as guarantors for a lease. After all, most students are minimally employed and have little or no credit history. This ensures that someone is always responsible for paying the rent and providing compensation for any damages that occur.

  4. Check in often – plan regular visits to check on the state of your property. Tenants will see that you’re keeping an eye on things, and you will be reassured.


Comments

  1. No_avatar_colleague_thumb

    Terrell Hill Reply
    about 1 year ago

    Also place security cameras in common areas. Just to put something on the students minds. Works for me!

  2. Colleague_thumb_1385139373-avatar-codypnw

    Amie D. Reply
    about 1 year ago

    I have a rental in a college town (Bloomington, IN - GO HOOSIERS!). It is in an area that primarily rents to graduate students, so I feel lucky for that, as they seem to take care of the property better. I used to rent it out by the room, but I felt the small loss (if any, at this point) in rent using it as one rental made up for having to track 3 leases, fill more rotation of vacancies and finding out who did what when it came to damages. Grad students tend to be a pretty good lot - mostly just study and it takes several years to finish a PhD...

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Zach Devine

AppFolio Property Manager
Property Manager
Santa Barbara, California


Website: http://www.appfolio.com
Phone: 8666481536

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