So I am in the middle of my first deal on some apartments near a community college. The units are currently rented for lower than the local average since the previous owner never raised the rates and the tenants have been there for a while. I am going to increase rents as the apartments turn over and I make improvements to the property.
As this is my first property I feel that there are two different routes on pricing and who to advertise the units to.
1. College Students
- More turnover - Year to Year
- Higher need for maintenance
- More Hassle
- Less Turnover
- Less Maintenance
- Less Hassle
So these would be my two prospects for tenants. I believe that setting the pricing for the apartments and the deposits will filter these prospects.
My question is if this is true and do you set a higher rent price and higher deposit for these reasons to look at finding college students as it is more likely for parents to be paying the rent for them and the amount of maintenance and turnover? Thanks for the help!!
If you are renting by the unit, I would just set rents at market and screen whoever comes along, college student or otherwise. If you want to make more money in the college housing business, then consider renting by the room. This is more work but you can command a premium.
I have to agree with Andrew. If you are targeting college students, definitely rent by the bedroom! It makes the eviction process easier and you will increase your cash flow. After working at a student apartment complex, I definitely understand your hesitation. There are pros and cons to renting to college students... Pros are: their parents are often the ones paying rent (so rent is almost guaranteed) and if you are competitively priced you will can keep some students for the four years they are in college (less turnover). Cons are: more damages to the property, roommate disputes, etc.
If you have any questions about student housing feel free to reach out to me directly!
Katie and Andrew, thank you for your response.
As this is my first rental property, I don't know if I have the systems and resources to manage renting out by room even though I know it is better for cash flow.
I guess the main reason behind my question is because there are currently tenants in the unit and didn't know if there was a way to filter your apps towards one group or another from your experience.
Thanks again for the help!
@Peter Vance There is landlord software out there that can help you to easily self manage your property! As far as targeting a specific group, if you advertise that you are renting by the bedroom it typically will attract the student population. You could also mention in your property description that you are or aren't student friendly. Hope this helps!