Are you considering investing in student housing? It may not be a bad idea. According to Statista.com, the vacancy rate of student housing units in the United States is 2.6 percent.
That means 97.4 percent of all student housing units are currently being rented.
Student rentals can be a great way to generate passive income; it could also backfire and be nothing but a headache. There are a few factors to consider when purchasing a rental property, especially when it comes to student housing.
If you are thinking about renting to college students, follow along with this guide to explore what you should know before making a decision.
What to Know About Renting to College Students
Rental properties are a great idea to generate some extra income. When it comes to student rentals, there are a few things you should consider before making a decision.
According to the National Center for Education Statistics, about 19.9 million students will attend colleges and universities in the fall. That’s a big market just waiting to be capitalized on.
Is renting to out a house to college students right for you? Read along to find out.
Pros
Many benefits come with student rentals you may not have considered. It is well known that when renting to college students, the demand will most likely steadily increase due to more and more students attending colleges and universities each year.
Higher Rent
You may be able to charge more for a student rental property based on the high demand in particular college towns. There is also higher demand the closer the property is located to the college or university.
Typically rent is based on how many bedrooms are available, and when it comes to college students, they usually will dorm with others.
Consistent Payments
Another benefit of renting to college students is the financial assurance that comes with it. Many students will have a third party pay for their rent, including parents or financial assistance.
Expectations
Students, when compared with other tenants, will typically have lower expectations on housing. They won’t care too much about the decorations and how the interior is designed.
College students will be more concerned with how close the property is to campus and what entertainment is offered nearby.
Little to No Marketing
Another potential benefit of investing in student housing is the property will sell itself. If your rental is close enough to campus and within a reasonable price range, students will come.
Cons
Student rentals seem too good to be true. With all those benefits, how can you go wrong?
Some potential drawbacks associated with renting to college students that you should consider.
Property Damage
One thing to remember when considering student rentals, is college students tend to be rowdy and break things. Now, this depends on the individual or individuals you are renting to.
Students studying law or in the medical field might be less inclined to party and more likely to be studying.
High Turnover
Another potential drawback is the turnover associated with college students. During the summer months, students will usually go home. You will need to figure out a way to rent during these months.
Most college towns are booming when school is in session and a ghost town when classes are out.
For More Rental Tips
You can see why renting to college students is a good investment. As long as you know what you are getting yourself into.
For more tips and resources for renters, landlords, and property managers, check out our blog!
