If you want to know how to reduce the risk of renting to college students, I will share my knowledge from 30+ years renting single-family homes just steps from campus. I started buying investment properties in my 20s and made every mistake in the book.
Fortunately, you won’t have to feel that pain if you follow this guideline for minimizing risks of young renters
How to reduce risks of renting to college students:
Here are the top issues you will likely face over time and solutions for minimizing or eliminating the risks:
Your Renters Added an Extra “tenant” (over occupancy)
Risk
You sign a lease with 4 renters. A few months later you notice an extra mattress in one of the bedrooms (or the living room!).
Most of the time students do this to offset the cost of their rent.
Why is this an issue
For starters, most cities and towns have occupancy requirements for rental properties. When the city completes an inspection, and they will, they will check how many renters are living in the unit and give you a summons. I have gone to court several times for this!
Over occupancy also causes excess wear and tear on your property which will require greater maintenance and repairs.
How to reduce risk
Make it crystal clear in your lease exactly who is permitted to live in the rental. Each tenant’s name should all be included on the lease. Also, document your overnight guest policy. Be sure to discuss the issue with them.
Complete regular inspections of your rental. You need to notify your tenants in advance of this but it can be hard to hide an extra mattress. When you are at the property to complete repairs or maintenance, keep your eyes open for signs of extra tenants.
If you know the neighbors, ask them to report any suspicious activity.
No renters during summer months
Risk
A lot of landlords fall into the trap of renting to students just for the school year because that is all they need a rental for. So, the rental is vacant for the summer.
Why is this an issue
This causes numerous problems. Here are just a few:
· You may need to find renters just for the summer months.
Or, you may lose income for those months
· Tenants may need to haul their furniture and belongings home for the summer causing more wear and tear on your rental.
· When a tenant is no longer in possession of the rental, they are less likely to renew a lease for the next year.
How to reduce risk
Whenever possible, create your lease for the entire year. If your tenant chooses to leave during the summer months that is up to them. Consider allowing the tenant to sublease. Leave it up to them to find a suitable renter for the summer. Many older students prefer to stick around campus for a job, sports or to stay with friends.
Unusual damage to your rental property
Risk
I have witnessed first hand the damage that unruly college kids can do. Here is a sample of the types of damage that you might expect:
· Holes in sheetrock
· Cracked toilet seats
· Broken windows
· Damaged ceiling fans
· Beer soaked carpeting
· Scratched hardwood floors (sometimes holes)
· Destroyed refrigerators
· Washers, dryers, dishwashers no longer work
Why is this an issue
Even if the students caused the damage themselves, they are going to want it fixed. Nobody wants to live in a slum. Someone has to pay for the repairs and arrange to have them completed. Good luck trying to collect from student renters, many who get their rent money from their parents.
That means you can take money from their security deposit, haul them to court, or eat the costs.
How to reduce risk
· Be an excellent landlord. Start by renting the property in great condition.
· Complete a walkthrough with the tenants and have them acknowledge the condition of the property in the lease.
· Make sure they understand they will be held responsible for any unusual damage.
· Check up on your tenants regularly. If you see significant damage, discuss it with them and send them a bill for the repair. Don’t do this for normal wear and tear.
The bottom line is that when you rent to a group of college students you can expect a bit more wear on your property. But by staying connected with your tenants and addressing issues quickly you can set expectations for behavior and avoid major headaches.
Many college students are minors
Risk
Many college students are under the age of 18 which means they may not be legally bound to your lease agreement. This age group typically has limited credit history and little if no income.
Why is this an issue
If your new tenants decide to get up and leave, you may have no recourse on collecting rent or unpaid bills and you could be left with a vacant rental.
Renters who just left the nest (home with parents) will often need more guidance on some basic responsibilities of maintaining their own place.
Minors are also under the drinking age in the US and may be consuming alcohol illegally on your property.
How to reduce risk
The best way to mitigate the risk of renting to a minor is to require a co-signer on the lease. This will most likely be a parent who takes responsibility for their child’s actions. If rent does not get paid, you can deal with the co-signer instead of the renter who is a minor.
Of course, there could be some pushback when renting to a group of students depending on how you prepare your lease agreement.
Another tip is to be certain to collect a full security deposit. Many areas allow you to collect up to 1.5 months rent. This may be a lot for youngsters to put up before even moving in, but it will show commitment on their part and help protect you if there are issues.
College students are usually away from home for first time
Risk
Students living on their own for the first time often have a sense of freedom. No more rules, responsibilities, chores. Well as we know that can not be further from the truth. In fact, many of the responsibilities that were handled by a parent or someone else are now on your new tenant’s shoulders.
Why is this an issue
· A college student away from home for the first time may not pay their bills on time as it is not their top priority.
· Student renters are known for piling up garbage until the last possible minute which can cause a mess and sometimes attracts bugs and vermin.
· Lack of regular maintenance and cleaning can put your property in disrepair and might even encourage a summons from a town official.
How to reduce risk
Fortunately, students are at college for a reason and most can learn very quickly. Get them off to the right start by setting expectations from day one. Spell everything out in the lease so the rules are in writing. Use reminders such as email or stopping by for the first few weeks to provide encouragement.
When something does go wrong, follow up with formal written notices and spell out the consequences. Just remember your ultimate goal is to establish a positive behavior with your tenants and keep them around for a long time.
College students can be noisy renters
Risk
Loud music, late night parties, band practice can all be a disturbance to the neighbors.
Why is this an issue
Remember, in a college town, some of the folks living near your rental have exams, need to get up early for sporting events, have jobs, want to study, or relax after a long day.
The neighbors of your rental property may look the other way the first time there is a disturbance but when this becomes a regular habit that is when you have problems.
Someone may call the police and then your rental may become a regular part of their route. Or worse, the city housing department will be called to inspect an issue based on a friendly tip.
How to reduce risk
Include a clause in your lease about the right to quiet enjoyment. Note the specific hours that are designated as quiet time. Most importantly, discuss this with your new renters before they take possession.
Just because they are not at home, does not mean there are no rules or consequences.
Check in with your neighbors periodically to see if there have been any issues. If a disturbance happens, address it with your tenants immediately. Follow up with a written noise complaint letter so they know you are serious.
Prevention is the best medicine.
Tenants fail to complete household responsibilities
Risk
When a few students get together to share a place, it is easy to get lazy with common household responsibilities such as putting out the trash, washing dishes, and cleaning.
Why is this an issue
Pizza boxes that pile up outside your rental can attract vermin. If a city inspector sees this you could get a summons. An overloaded dishwasher can cause a glass to break creating a big problem. When mold starts to build up in a shower, it can make it difficult to attract new tenants in the future.
How to reduce risk
Discuss this with your renters when they take passion. They could create a simple chores list or calendar and rotate responsibilities. Some tenants may want to pitch in and hire someone to do cleaning. But it is better if they plan this out ahead of time before it is too late.
College Students are not use to paying bills
Risk
Your rent may be late or not paid in full. Young tenants may also fail to pay utilities.
Why is this an issue
The last thing you want to do is start chasing down late rent payments. If you allow it to be late even one time, it could become a regular thing. You may start getting excuses such as having all the rent except for one person’s share, making you have to go into collection mode.
How to reduce risk
The very best thing you can do to prevent late payments is to require your tenants to use an online rent payment system that draws the rent on the same day every month from their account. I would couple this with sending them a reminder notice several days before the rent is due so there are no excuses.
Landlords who insist on a check could stop by to pick it up. Make it easy for them to give you the money. But be consistent.
If rent does arrive late, send a formal written notice with your expectations and the consequences of failing to act.
College students are short-term renters (max 4 years)
Risk
How students rent off campus housing from town to town can be different. But in general college is just four years and most first and second year students live in dorms. So, at best you may only get 2-3 years before tenant turnover.
Why is this an issue
The process of finding good paying tenants can be time consuming and costly, particularly if your property is not rented for even a short while. Plus, moving in and out causes more wear and tear on the property.
How to reduce risk
Be an exceptional landlord and do everything you can to have the best, off campus rental around. Make it so your tenants don’t want to leave. Encourage your renters to find other tenants to replace them when they leave. “Hey, do you know anybody who might want to rent this property?”. The word will get out quickly.
I have had many years go by without having to find tenants because one person leaves and the remaining renters find someone to fill that spot. They don’t want to leave.
Students Want to Make Renovations
Risk
Your young renters may want to renovate their new rental with bunk beds, painting the walls themselves, a garden, room dividers, clothes racks and much more.
Why is this an issue
The inexperienced carpenters and painters can cause more damage than it is worth. When floors get scratched, holes are in the wall and paint gets where it should not be, you will have a problem when they leave and the next tenants are ready to move in.
How to reduce risk
Agree but have them hire approved professionals to do the work
Require any changes to be unattached to walls or floors
Inspect the room with them before and after the changes and agree that they will pay for any damage immediately
You could also just say no.
Is Your Rental Safe for Young Renters
Risk
College students can attract all kinds of risks from intruders gaining access through an unlocked window, to guests slipping on ice that was not cleared.
Why is this an issue
You could be liable if someone gets hurt or abused or has property damage. Your tenants may also fear the property is not safe after an incident and break the lease leaving you with a vacancy.
How to reduce risk
Discuss safety concerns with your tenants before they move in. Provide them with information on some of the risks.
Be very clear who is responsible for maintenance such as removing snow. Include this in your lease.
Have proper insurance coverage just in case something happens.
Do a safety check of your property. Make sure you have adequate lighting, sturdy handrails, unimpeded flooring, locking windows and doors. New locks should be installed every time you get new tenants.
Add a NEST doorbell. Let the tenants know you have this and share the access with them so you can all see who is coming and going. Be sure to check with your town or state before installing any type of camera on a rental property to make sure it is legal.
Leaving house vacant during breaks
Risk
Students can leave a house vacant for 1-5 weeks at a time during school holidays
Why is this an issue
Some things to consider are:
· Break-ins / theft
· Frozen pipes if tenants turn down the heat too low
· Garbage and mail go uncollected
· Unpaid utility bills
· Weather damage from open windows and doors
How to reduce risk
Have tenants notify you when they plan to leave the property unattended. Complete an inspection of the premises to make sure doors and windows are locked, garbage and mail is picked up, lights are on in evening and heat is on as needed.
Provide tenants instructions on exactly what they should do when leaving the property to make your job easier. You have an investment to protect.
Parking violations
Risk
Sometimes college students drive. You might have 3 drivers and 2 off-street parking spots. Kids get creative. I had one tenant who thought it was okay to park on the lawn next to the garage. The city did not like that!
Why is this an issue
Illegal parking can result in costly parking tickets, a summons from the town or city, property damage, or damage to a vehicle.
How to reduce risk
If your renters typically will have a car, think of what you can do to have one spot for each tenant. Be sure to do it legally. It will pay off in the long run.
When off-street parking is not available, can you help obtain parking permits for your tenants.
If parking assistance is completely out of the picture, be sure to discuss this with tenants before they sign the lease. There should be no surprises.
Emergency repairs
Risk
You might get called in the middle of the night for a water leak, clogged toilet or broken window.
Why is this an issue
Because you would rather be sleeping!
How to reduce risk
Being a DIY landlord is a great way to save money but after a few calls in the middle of the night you might not want to be a landlord anymore.
Consider all of the repairs you may need to make such as plumbing, electrical, roofing, and appliances. Then research contractors who you will give approval for an emergency repair. Make it clear with your tenants that they will be responsible for any repairs if they caused the damage.
Is it worth the risk renting to college students?
Renting to college students can be an excellent financial decision if you manage the risks properly. Sometimes all it takes is a little effort up front to get your new renters to become great long-term tenants.