I've recently purchased a couple of 4BR SFH in a college town and am trying to decide how to structure the leases upon renewal. The current leases (which I inherited from the prior owner), are separate agreements with each tenant. Some of the tenants are students that pay rent either via student loans or their parents. I'd like some advice on whether to pursue a joint-and-several agreement going forward with a single lease/rent amount containing all tenants versus continuing to lease to individuals. Considerations I have so far are:

- Co-signers - should I check and require a parent or similar co-signer for each tenant without sufficient independent income? How would that work with a single lease, multiple co-signers? 8 parties on a lease seems like a coordination headache

- Should I consider available student loans as sufficient income for rental without a co-signer (perhaps by requiring a bank statement with >6mo of liquidity for rent)?

- Many students graduate/leave in the middle of the year (winter/summer semester). How should I handle early termination? Should I always sign an annual lease and allow for subleasing, include an early termination fee, or something else?
Individual leases would seem to help with the last point, but create a nightmare where each BR is out of sync (sounds terrible). I’ve also heard that individual leases can yield slightly higher rental rates, but obviously involve more headache. What do you all think?

Note this is specific to student housing. I understand for a more traditional rental a single lease is almost always preferable.

Google 'jointly and severally' and use it in your leases.  Everyone on the lease is responsible for all the rent, so if one tenant bugs out, the others are still responsible for that share.

DO NOT rent to students WITHOUT getting parent or guardian to sign on as non-occupying co-signing tenants.  The kids won't care about their credit nearly as much as the parents will care about their credit and possible judgments against them.

I have a question about getting the parents to co-sign.  What do you do if parents don't have the credit to co-sign at all?  We have a property near a school which typically enrolls students who are likely the first generation in their family going to college.  Many of the parents are just scraping by and don't have good credit.   

@Mike Morse , so if that particular tenant/tenants can't qualify even with the parents, why accept them as tenants?  Just say "next"!

@AJ Pryor

We structure ours similar to what you inherited. They all sign individual leases but are bonded by a joint and several clause. Everyone pays separate deposits and we charge per student per semester due in full on or before the first day of class each semester. Each group is required to do 10 month leases from August to May. If someone graduates or needs to leave after fall semester make them find someone to take their place.

Originally posted by @Eric Bassett :

@AJ Pryor

We structure ours similar to what you inherited. They all sign individual leases but are bonded by a joint and several clause. Everyone pays separate deposits and we charge per student per semester due in full on or before the first day of class each semester. Each group is required to do 10 month leases from August to May. If someone graduates or needs to leave after fall semester make them find someone to take their place.

I rented to students, and ended up focusing on law students, but I rented tiny studios to them.  What I wanted to add, is that I learned that if I allowed them to sublet over the summer, they would want to come back after the summer, so you can end up keeping them for several years.  My students would have internships somewhere else for the summer - but - there are students from somewhere else who come to where your tenants' college is, and they will pay a premium for a short-term summer rental for their internship.  So, it's a win-win.  I would just write up an agreement that the original tenant is still responsible for the rent and I would give them written permission for a long-term guest.  My tenant would give me pre-dated checks for the summer, and I'd deposit them each month, and my tenant collected rent from the sublet tenant.  I never had any problems doing this.

I had one law student ask me if it was okay if he profited from his sublet and I said sure!  LOL.  So, they leave all their furniture, and sublet it as furnished with my permission.

I got to where I did not want parents as co-signers.  You can end up with helicopter parents who will call you asking about their kid or wanting to argue about stuff.  So, I just ended up running the student's credit and asking them for proof that they were a full-time student, which you can get by having them forward their college email to you from their financial aid office, etc., or they will have a new student ID.  I'd make a photocopy of the student's driver's license or passport, and I told them that this is a contract between me and them and if they break the contract, it would be them getting sued, that they were responsible as an adult with no parents involved.  I never had a problem with it.  In fact, I had way less problems doing this.  Then, when the helicopter parents would call me, I'd just say, "I'm sorry, I only talk to people on the contract."

Honestly, with a co-signer, legally you have to copy them on every notice you give your tenant.  They can also sue you.  And a co-signer never guaranteed me a trouble-free tenant.  The only time a co-signer is any good, is if you have to sue for damages or unpaid rent.  It's just not worth it, in my opinion.  And honestly, if the student bails and you send them a notice that you're going to sue them, their parents will probably end up sending you a check, anyway.

We also went with month to month agreements only, so we could kick someone out, and I made sure they knew that, too.  They're going to stay through school, most likely, so you lose the power to kick them out if they have a 10 month lease.  If a tenant wants to leave, it's better to just let them.  You can make them a deal to try and find a replacement for you, but you really should vet that person anyway.   

Oh, and I also agree with the others that it's easier to have separate rental agreements for each tenant.  Roommates come and go, and it would be a pain to have to keep changing the contract.  I wouldn't do a joint and several agreement.  I'd keep them separate and just charge enough of a deposit to cover any damage.  If you can charge a non-refundable cleaning fee, that would help toward the clean-up if you were to end up with the unit empty and had to rehab it, or you decided t clean the carpets or whatever.

Thanks Sue for the fantastic response