Student Rental. Summer Vacancy?

24 Replies

Hello all,

Just found a really attractive property right near a local college. So far the numbers work very well, but I'm not sure what to factor in for the vacancy rates, since as a student rental it my not have tenants for the summer months.

The current Vacancy rate for that area according the CMHC portal is 6.2%.

To any of you with student rental properties what do you do over the summer months?

I don't have a student rentals but in my experience, university rental property leases were still one year leases.  It was responsibility of the students to sublet accordingly/stay/work it out.

Thanks Sam, good to know. I have some friends that manage some student rentals as well, so I'll try to ask around to get more info.

Yep, good idea.  I'm sure some student rental landlords will chime in here as well.  But the one year leases were the norm at my university.  

My father does a lot of student rentals and he demands year long leases. This is fairly standard around that college, I think it is for the most part around major universities nation wide. Given that, students don't have much of a choice. A lot of them sub-lease it during the summer. Just make sure that they get your permission to sub-lease it.

@Dylan McLauchlan  

I offer flexible lease lengths to students. If they want a 9 or 10 month lease, they pay a little bit more to cover any potential summer vacancy. Otherwise they can sign a standard 1-yr lease. There's always a few students hanging around over summer who need short-term housing. You just have to be willing to be flexible and know that you're going to have to clean a bit more frequently.

@Adrew Syrios

Thanks, good to know.

@Jackyn B.

That's a great plan. I could definitely accommodate having a vacancy in the house. Seeing as I plan to be a live in land lord, so I would definitely have the time to clean up, and oversee the transition.

I know that at my university they were normally fall/spring leases and owners charged a little more to cover the summer months.  Some owners also rented out the property to students taking summer classes too.  

@Dylan McLauchlan

We have one student rental, but still require a 1 year lease for tenants.  We haven't had any tenants who have been upset by the length of the lease.  We're near the University of Kansas, and in this area 1 year student leases are fairly standard.  

@Dylan McLauchlan  ,

As others have said, it may vary from area to area, but if the rental market is tight during lease-up, you should be able to get a 1yr lease. Was the same way where I grew up in San Luis Obispo with Cal Poly. Some did 9mo leases that almost collected the same rents over the year. Trying to re-rent during summer is rock-bottom rate because there is so much empty inventory. 

So make sure you make whatever you need in the original lease, and be clear with them from the beginning. If you're strict about subleasing, expect the students to go behind your back to lease it out anyways!

Also, get good deposits, and parent co-signers whenever possible! They're getting some money from parents? Don't have great credit? Get them on the lease!

Get the parents to cosign on the lease as well.

At my Uni you either did a 10 month or 12 month lease.  
The 10 month was a little more expensive.

The pro to having that 2 month window is the landlords use that time to repaint and repair the units for the coming school year.

I have a four bedroom house with four students, each signs a 12 month lease and they split depending on number in unit.  The options are endless to length of lease, if shorter than 12, will allow clean repair time but all crews are running at max because of that...  Seems like it may only be a month of dead time, they finish in May and start renting in July, so it would be just June in most cases.  Make sure you keep eyes on house, check filter and for water leaks in ceiling and plumbing every so often, allows you to keep asset in repair and you will see how they are keeping it up too.  If they are looking for work and have some skills, have them clean, repair, and paint other units for you!

Every place I ever lived in during college demanded a 12 month lease. We had to either get a job nearby for the summer, pay for it out of pocket, or sublet to someone else. 

Someone on these forums had an idea that I liked with student housing... you offer the student the ability to pre-pay his or her rent for the entire year in a lump sum and give them a discount in exchange. The advantages for the parents are that they don't have to deal with rent checks every month and the advantage for you is more cash in your pocket up front.

Hi Dylan,

I have a 10-unit student apartment in London which is broken up into a 2 unit, 5 bed duplex.  The leases typically run from May to May on a one year basis, however with the influx of new residences and purpose-built student housing around campus, the supply is starting to outweigh demand.  Therefore, I'm seeing a lot more 8 month leases as the students have more options.  It is best to start advertising for rent for the upcoming year in Dec/Jan, and if it's not filled by Feb, you could be stuck with empty rooms during summer.

You can expect rents to run anywhere from $400 to $550/mth, depending on condition/age and proximity to Western.  I would recommend including the utilities in the rent so you have control, or least water/electrical, since students are notorious for skipping town on the last bills which then get added to your tax bill.  

Thanks Chad. I hadn't though of advertising for summer renters so early 

Hi Dylan,

If there are other attractions in your area you might consider vacation rentals during the summer months.  It is very common here in RI along the coast to do college rentals from Sept to May and summer or weekly beach rentals June-Aug.

Josh

Sorry Dylan, what I meant was that you need to start advertising in Dec/Jan in order to get a 12 month lease starting May 1.  If you miss that window, there's a good chance you may be empty for the summer and have to get an 8 month lease starting Sept.  Getting rooms rented for summer is next to impossible given the number of sublets available, unless you  are a stone's throw from campus.  Hope that helps.  If you want any more info about rentals at Western, just PM me. 

I just graduated from University and at my school it was a 1 year lease, or a much more expensive 8 month lease.  Most kids preferred the 1 year lease. 

If you have trouble finding renters who will sign a 12-month lease, maybe look into Airbnb or another VRBO website and rent the space on a weekly basis over the summer to recoup some lost vacancy. You can probably charge as much per week as a vacation rental than one total per-month rent during the school year. Just a thought!

Originally posted by @Dylan McLauchlan:

Thanks Sam, good to know. I have some friends that manage some student rentals as well, so I'll try to ask around to get more info.

I have a student rental and require a 12 month lease. If you can possibly get the lease to start in either July or August you are much further ahead in the long run because it is during this time that students will be looking for places. In my area most students are willing to start a lease in May because of the shortage of housing in the area and very few places are available in August. 

One thing to consider with students as well, since they will be staying for more than one year. I would suggest that after the initial lease is up you require that they either sign another 12 month lease or charge and extra 8% to go month to month. 

The last thing that you want is students who are month to month and decide to move out in February when there will be little demand for student housing.

We do operate as a vacation rental in July and August. We lease from September-June as furnished rentals for students primarily, but sometimes other folks in different situations. It works very well and increases ROI because vacation rentals are higher value by far. You need to be in a good area with a good property for vacation rentals and be willing to take on hiring and organizing cleaning crew. Other alternative if you go furnished is airbnb in the summer. We use this for July 1-15 to fill in bookings.

If it is customary in your area to do year round that is what I would start with. Our area 9 month is customary and in the summer we do vacation rentals but that is unusual.   I would never do month to month with students and I strongly advise against it. It puts you  in a bad situation if they end the lease on an off month. If you are off-season for getting student tenants though I  have had success with changing the lease end date to correspond with the semester end date and offering a short term rental or a few months longer.  One lease for all students with co-signers has been most successful for us.

Typically the dorms shut down for the summer. You may want to see if you can network with some students in some of the larger clubs on campus. Perhaps give them some flyers to post somewhere in the dorm lobbies about your Summer vacancies prior to the end of the school year.

I would suggest a donation to the club for their support, or perhaps a reward for the individual students that help you. Send them $1 for every picture that they send you of a flyer that they hung up. I would number the flyers so that they don't scam you.

If it is a rural area with a large migrant population during the summer you may consider reaching out to those people to fill vacancies as well. Perhaps a Hispanic newspaper is in town?

Perhaps a $150 rental credit for the following year if the students in your unit find a tenant for the summer months for you.

Just some ideas. Hope it helps or at worst gets you thinking about alternatives!

Best of luck,

Lucas Knutzen, Labrador Investments

Hi Dylan,

We've rented to students in Rochester NY for about eight years, and we've always had a 12 month lease. We've never had a student dispute that. Also, we have a very strict lease to minimize exposure on problems, and thank goodness, we've never had one. We get parents to co-sign whenever we can and we run a background check on everyone. We want to make sure that when people are sharing a common space, even if they know each other, the we know who they are too--well worth the money. We've just now started putting desks and some furniture in the duplex to minimize damage from kids moving furniture in and out. Hope this helps. 

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