I purchased a small 2 BR, 1 BA condo for my daughter and her fiance to live in while in college. They are about to get married and purchase their own condo (which they also plan to eventually have as a rental property when they are able to build). I am planning to start renting the condo I owned, and, in this area, right across the street from the football stadium, I will most likely attract college students. Any advise from pros at renting to college students is appreciated!
I would try to catch some graduate level students. Grad students are serious about their studies and have made it past the partying undergrad days.
If you must rent to undergrads, take some time to get to know them. Find out if they're in a fraternity or a sorority (red flags for me). Find out their major, some majors require more time and effort than others meaning your tenants is more likely to be studying than partying. Ask them what they do in their spare time (if they have any). Do they volunteer? What are their extracurriculars?
Are they on financial aid? Financial aid students are my favorite. They're required to maintain a certain gpa in order to keep their aid and they can frequently use their financial aid to pay for housing. In order to verify their 'income' ask to see their financial aid statement. Most colleges include housing cost when they make their budget for financial aid. Unless you're in an expensive market, living off campus is generally cheaper. However, colleges base their finaid budget on on-campus housing. This means if a student has a total financial aid package they generally have more than enough to cover rent.
You could also check with your daughter and see if she has any responsible friends who will be looking for off-campus housing.
Best of luck to you! :)
Some really good advice so far. Interested to read more.
I've heard from someone who has several rentals in a university town. They say renters don't stay as long as in other areas but on the flip side it's really easy to make changes if a tenant turns out to be not the greatest or, for example, you want to raise rent. Their rentals are also in a nice area that is in high demand so I'm sure that helps.
Thanks for the advice! I was very fortunate to get this unit. It happened to be owned by a friend that teaches at GSU and he sold it to me when he moved. These units rarely come up for sale and are usually grabbed quickly by one of the property management companies in town or investors with more of an inside track. It is directly across the street from the stadium, right across the street from a Campus bus stop and an easy walk to the heart of campus. I hope to have this unit for a long time, as I don't expect I will have any problems keeping it rented.
@Jaclyn Bays , I like what you said about asking to see the financial aid statement. I knew to try to get a parent guarantor, but in absence of that, I can see that proof of financial aid can be looked at the same as proof of employment income.
Money talks, employed parents cosigning solves many problems
How do you plan on managing the condo (Self Manage or Property Manager)? If you plan on managing student rentals yourself I would say you need to be located relatively close to the units. My student rentals are primarily graduate students and are very quiet and focused on their studies but they always have little needs that I don't see in my standard non-student rentals. At least in my case most of the graduate students have not been in the United States long and need a little help with things we might think are obvious and as such necessitate more management.
Best of luck with the condo!
+1 on grad students.
I am currently offloading most of my traditional rentals in favor of student rentals. Over the past few years, these have consistently been way more profitable. Contrary to Scott's experience, my properties have significantly lower management requirements. I suppose it has something to do with the International background of his tenants.
You've already mentioned that you are getting the parents to cosign. That is good. The other thing I recommend is that you spend an extra 30-90 minutes at the move-in inspection teaching the tenants how to take care of your house. Many have never done laundry, bought dishwasher detergent, changed an air filter, located a shut-off valve, etc.
Another vote for grad students. I have also reached out to the international office at my local university. Here, at Duke, it is called the International House. They coordinate housing for incoming international folks. Some of my best renters have been international grad students or visiting professors from Armenia, South Korea, Holland, etc.
A little late to the party, but I'm looking at college rentals right now too.
For those of you that are advocating for grad students, how are you able to choose them over an undergrad because I'm assuming at some point an undergrad has applied to live in your house? I just know there are very strict laws on discriminating when it comes to rentals and I guess I was wondering if this is considered discriminating to pick a graduate student over an undergrad. Or if you can give that as a reason when you turn down a potential tenant.
Getting parents to co-sign is a great idea, but their checks still bounce too. Have all students sign the lease joint and several so that if one defaults, the others are on the hook also.
Another option would be to employ a local PM company who specializes in management of Student Housing. They already know the local landscape wrt to where to place ads to attract the best students, know the latest student housing bylaws instituted by the College and should have the systems in place to deal with the day to day headaches. Dealing with students is far more intensive than with regular renters. Use the PM company for the 1st year or 2, which will cost you some cash out of pocket, but shadow them in their process and once you feel comfortable doing it, go out on your own.
However, I just noticed you have a 2 bed condo so would be easier to manage.
Simply, I've found the returns to be much better than anywhere else in my area. Much easier to ask $400 for three separate bedrooms than $1050 total from a young couple with a child. I make all my tenant's parents co-sign the lease. First months rent and a security deposit equal to a months rent due immediately upon signing.
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