Renting to college students

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Renting to college students

Jordan Woolf
Flipper/Rehabber · Huntsville, AL · Member since 2019 · 117 posts · 57 votes

I am looking at rental properties near a college and was curious if this is a good strategy. Has anyone tried implementing this strategy? If so, was it a positive or negative experience? I would most definitely be working with a property manager.

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Dylan Earl
Thorold, Ontario · Member since 2016 · 62 posts · 58 votes
7y

I rent to students and I have some recommendations:

1) Sometimes people/roommates don't get along... make sure they sign a "roommate agreement" which covers guests, noise, furniture, appliances, maintenance (if applicable) etc. 

2) Sometimes people want to move out while the others don't.. make sure they are ALL on ONE lease. If one wants to leave, EVERYONE has to leave (OR they find someone to replace the one leaving) this can be done by making sure all of their names are on ONE lease agreement and that it is specifically stated as "a collective single tenant"

3) Sure, students party and make a mess, that's to be expected. If they are too loud, bylaw will fine them... however when damages occur, I can guarantee they don't have the resources to get it fixed. I'd recommend monthly or quarterly surprise check ups on the property. We usually provide 24 hours notice to tell them we coming to change out furnace filter OR test smoke detectors

4) Get their contact info, drivers licenses, student ID numbers, parent contact info, send out an email in the beginning with EVERYONE on it so they know what to expect. 

5) Take photos before the unit was occupied. After they move in, get THEM to fill out a move-in inspection checklist.. anything NOT on the inspection checklist discovered during move out needs to be identified and brought to their attention + their parents promptly. 

Takes some effort but students come and go and cycle which is nice if you end up with a not-so-great member! 

Best of luck

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  • Jon Schoeller
    Flipper/Rehabber · Charleston, WV · Member since 2016 · 172 posts · 126 votes
    7y

    Hello Jordan! This will depend a lot on your personal temperament and how well your PM vets/manages the tenants. Are you talking about grads or undergrads? Usually a big difference. Look, you can make money renting to almost anyone. A, B, C, D grade properties, trailers, college students, retirees, etc as long as you have a system and it is managed properly. I am from a huge college town. I would not rent to any undergrads without a thorough screening but that is just me. Good luck! 

    2Reply
  • Mike Franco
    Los Angeles, CA · Member since 2013 · 555 posts · 261 votes
    7y

    college kids scare me. Even though you can charge and deduct more, they easily have the capacity to trash your place.

    and with most kids these days, mommy and daddy never let them do chores in their whole life, so plenty of them don't know how to wipe their butts, much less vacuum and mop.

    on the plus side, mommy and daddy are willing to back their kids up as cosigners. I've had these parents call me before, begging and trying to persuade me to let their kid + 3 other classmates trash my house.

    Let me show you how these recent 22-23 year old college grads lived. They were only in the house for 11 months. Piss and shiet, holes punched in door, massive spills on carpet.

    Yeah, they had the money, but they were pigs.

    I firmly believe if I had brand new carpets, they would be trashed...

    1Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    7y

    @Jordan Woolf

    I target last couple years of undergrad up to first 3 years of real world working life with many of my properties. Mom and dad co-sign, run mom n dad’s credit, talk to their employer even if it’s only a summer employer, and stay on top of the place. Boots on the ground & eyes on each room every quarter. No exceptions. Lots of my tenants come from small towns,... on occasion I’ve talked to their former high school teachers (I spent time in that world and it’s not uncommon for a common acquaintance to pop up).

    No first years. Ever. Not worth the hassle.

    I’ve got a triplex full of 3 groups of masters students at the moment, works wonderfully.

    2Reply
  • Dylan Earl
    Thorold, Ontario · Member since 2016 · 62 posts · 58 votes
    7y

    I rent to students and I have some recommendations:

    1) Sometimes people/roommates don't get along... make sure they sign a "roommate agreement" which covers guests, noise, furniture, appliances, maintenance (if applicable) etc. 

    2) Sometimes people want to move out while the others don't.. make sure they are ALL on ONE lease. If one wants to leave, EVERYONE has to leave (OR they find someone to replace the one leaving) this can be done by making sure all of their names are on ONE lease agreement and that it is specifically stated as "a collective single tenant"

    3) Sure, students party and make a mess, that's to be expected. If they are too loud, bylaw will fine them... however when damages occur, I can guarantee they don't have the resources to get it fixed. I'd recommend monthly or quarterly surprise check ups on the property. We usually provide 24 hours notice to tell them we coming to change out furnace filter OR test smoke detectors

    4) Get their contact info, drivers licenses, student ID numbers, parent contact info, send out an email in the beginning with EVERYONE on it so they know what to expect. 

    5) Take photos before the unit was occupied. After they move in, get THEM to fill out a move-in inspection checklist.. anything NOT on the inspection checklist discovered during move out needs to be identified and brought to their attention + their parents promptly. 

    Takes some effort but students come and go and cycle which is nice if you end up with a not-so-great member! 

    Best of luck

    5Reply
  • Jordan Woolf
    OP
    Flipper/Rehabber · Huntsville, AL · Member since 2019 · 117 posts · 57 votes
    7y

    Thanks for the advice everyone. I haven’t actually though about undergrad/grad students. I could see how that could potentially make a big difference. I know that college students can be pretty card on properties. When I moved into an apartment with a classmate, they hadn’t used a vacuum the entire 2 years they lived there and there were stains everywhere etc. I feel like it could be a good strategy as long as the property doesn’t turn into the place to party and if you can find students with a little respect. I would have to find a PM that has experience with students as tenants.

    0Reply
  • Mike Franco
    Los Angeles, CA · Member since 2013 · 555 posts · 261 votes
    7y

    i don't think any PM's want to be babysitters.

    people have recommended jacking up the rent and including a maid to clean and vacuum common areas biweekly, because you know these kids are all the same. No one likes to clean their room. And when it comes to group responsibilities, every kid plays the game of "NOT IT".

    A neglected kitchen situation can quickly turn into a pest infestation. 

    0Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    7y

    @Jordan Woolf

    I have ALL turnovers set as August 31st, 1 year leases. My town is 250,000 people and the university is 24,000 (~17,000 from out of town)... the increased demand that month helps with keeping rents high. A quick email to the kids with cc mom or dad often fixes just about anything!

    0Reply
  • Jordan Woolf
    OP
    Flipper/Rehabber · Huntsville, AL · Member since 2019 · 117 posts · 57 votes
    7y

    @Kris H.

    It makes sense to start the leases then. I could see how emailing parents would solve a lot of problems as well. The college I am considering is a fraction of that size and it is not known for its partying. I don’t think it would be difficult finding good tenants in this area.

    0Reply
  • Maya Roberts
    Rental Property Investor · Sunnyvale, CA · Member since 2019 · 60 posts · 40 votes
    7y

    College students can be rough, but they can also be good for cashflow.  Every tenant is a 'renter' in theory, compared to a family.  You can always ask for a higher deductible.  Also, try to look up their social media to see if they always party at a house, go out to the bars/clubs or perhaps don't party.

    My suggestion: if you're comfortable and can really screen tenants then go for it.

    2Reply
  • Rob B.
    Chicago, IL · Member since 2018 · 546 posts · 227 votes
    7y

    This is definitely one of those instances where it really takes consideration of the type of student (ie. graduate vs. undergraduate) that you want to rent to. Thus far I'm of a similar notion as Maya and Dylan in that you want to make sure that your screening is on-point, and honestly make sure you have your process in place as far as having them on ONE lease, move-in/move-out checklist process, and frequent check-ins. A very close family member is located in the Hyde Park area and it has proven to be a great market for graduate students at the University of Chicago. Usually, their rent is covered by the program that they're in and with it being a top university (and one of the most challenging) you're dealing with a different type of student. Just don't violate any FHA rules in your screening process.

    It all comes down to the amount of risk you're comfortable with assuming (as far as damages to the property). Probably putting the property at higher risk when dealing with undergrads. But again, students can be great for cash-flow. I would say to get a feel for their social handles, but the only problem with that is you might be making a decision based on a front (ie. someone's social channels may put forward an image that they want the world to see of them vs. how they actually might be in person). Just a thought! But some great suggestions have been noted above. @Jordan Woolf

    2Reply
  • Patrick LiskaPro Member
    Investor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
    7y

    Jordan,

    I have 4 student rentals right now, 24 beds all together, they are great source of income if you can keep them filled. having a PM is a great idea, to handle all the student problems, all my properties are managed by a PM which makes them truly a Passive investment for me. You will get some damage, my worst one was this past year in one of the properties, not one student got their security back, and it is a must that you have all parents co sign, just in case. @Dylan Earl gave you some great advice, if you decide to go the student route, you should implement those ideas.

    3Reply
  • Sharon Rosendahl
    Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
    7y

    My niece rented a room last year. Each room was its own lease although the house was all students (she was in her first year but already had 2 years of college from high school). They had to pay a large deposit. Parents cosigned. Rent was about 1 bedroom apartment cost but included most furnishings and some utilities. Other utilities divided by tenants. Lease was for full year, Sept to Aug even if you planned on going home for the summer. 

    I talked to someone who does this at another school, similar set up. He says they make bank.

    2Reply
  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    There is a massive thread on here about student rentals if you use the search function. Myself and @Will Gaston probably manage 60 houses between the two of us in two different regions. You'll get lots of good advice in that thread. 

    [email protected]732-289-3823
    4Reply
  • Kenny Dahill
    Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes
    7y

    One of my rentals is a 4bd college rental for ASU.

    Choose your tenants wisely and you should be fine.  My house is slightly outdated now but still a nicer college house.  So rents is slightly above college house market.  It's also probably a mile just outside the popular college rental areas so it doesn't necessarily attract the massive partiers.

    Here's a tip: don't stress about the condition until they've moved out!  

    And Tip #2: college kids love pizza and beer (if legal), bring some whenever you want to do an inspection or as an award for maintaining the house.

    1Reply
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