Students – a much debated demographic. For landlords, this debate rages on as they consider the costs and benefits of renting to students. Students are sometimes considered an easy market to tap into, but some landlords appear to hold the perception of students as being irresponsible tenants which puts them off. We’ll take a look at some of the costs and benefits of renting to students, and how you can mitigate any downsides to turn a profit.
First let’s take a look at what makes students an attractive market for landlords to tap into. There are many reasons why renting to students shouldn’t be overlooked as a potentially profitable business model for your accommodation.
A Steady Supply
One of the upshots of renting to students is that they’ll generally always be there. Student intake at the start of each semester is fairly reliable, and economic downturn may not have a noticeable effect on student influx. In contrast, demand for renting from other demographics can fluctuate to a greater degree with the economy, potentially leaving you with insecurities as a landlord.
Student housing requirements
Students typically have a few clear, yet limited, desires from their accommodation. The predictability of these desires as well as the typically low cost of appeasing these demands makes students an appealing market. Students are seeking accommodation that’s close to campus and clean and quick to access. Thanks to general student requirements, marketing apartments to this demographic can save you a lot of trouble.
“As students leave the roost, they tend to stay under the wing of their parents for a few years and that means financial security as much as anything else,” says John Beck, an editor at Essayroo and Paper Fellows. “Students are less likely to leave rent unpaid thanks to the possibility of parents stepping in.” Of course this is not the case with all students or a standard applicable position, but this consideration can provide landlords with another reason to rent to this demographic.
Potentially Higher Rents
Student markets often offer the potential for landlords to claim higher rents, as students tend to share accommodation with other individuals, and by pooling the cost of living this can enable the overall rate of rent to be increased.
Despite the many reasons why landlords may be tempted to lend to students, this demographic sometimes suffers a bad reputation in some regards. Let’s explore what the risks are to landlords letting to students.
Student lifestyle can sometimes be a little less stable that the average renter and students often come with the expectation of property damage over the duration of their tenancy. This is sometimes unwarranted, but if they occur student parties as well as general neglect can contribute to wear and tear and, occasionally, more substantial damage.
“Landlords can mitigate the risk of this by taking deposits that will cover any damage and making it clear to students from the outset what their responsibilities for care in the property are,” says Diane Smith, a writer at Law Essay Help and Assignment Writing. This can act as a cover for landlords to ensure they are not out of pocket in the event that the property sustains unexpected damage.
Late or Unpaid Rent
Students are often for the first time in their life experiencing the adult world and for this reason some have differing expectations for responsible behavior. Students can, on occasion, neglect the responsibility of paying rent on time.
In order to ensure rent is paid consistently on time, landlords can leverage software and digital transactions such as direct debits. By taking the responsibility largely out of students’ hands utilising these tools, landlords can seek to ensure timely payments.
Because students are sometimes transient it can be the case that they’ll often move house year on year – students may likely move on upon completion of a degree. This can increase the costs associated with finding new tenants and marketing your apartments.
Early communication as to when leases are expiring is key. Seek this information in a timely manner or ensure early notice is a feature of the tenancy agreement so that if they’re leaving you’ll have this information well before it is necessary to effect a transition to new renters.
Students are ultimately a demographic like any other, with pros and cons associated with letting to them. There is potential for achieving rental profit letting to the student market – if the risks can be mitigated.
Katherine Rundell is a property writer at Essay Services and Dissertation Writing Services. With her partner Alex, Katherine has been accumulating properties for rent in the student town of Providence, Rhode Island and finding success in this market. Also, she is a manager at Essay For Sale writing service.
This is general information only and the views of the author(s). It is not financial advice or recommendations, and does not take into account your personal needs, objectives and financial circumstances. Please carefully consider whether this information is appropriate for you.