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Managing rental housing for students is a reliable investment opportunity. Being in a university town means there are thousands of potential new tenants ready to move into your property. However, working with this demographic also comes with its challenges. Their age, lack of income and transient nature means you’ll deal with a large number of tenants and situations.
If you’re considering investing and managing student housing rentals, you’ll need to prepare for how to best meet the needs of this particular tenant group.
Before we dive into the problems with managing student housing, if you would like to get the financing you need to start managing student housing today, all you need to do is click the link below to book a free strategy call with us at LendCity. From there, we will help you find the mortgage that best suits a lifestyle that includes managing student housing.
Managing student housing requires more support
While your tenants may have a year two of dorm life under their belts, they are still new to the idea of being renters. After 18 years of having mom and dad take care of housing issues for them, concepts like paying rent on time, identifying maintenance issues and negotiating noisy neighbours are new.
Instead of having your property management company handle every minor inconvenience for your tenants, invest in creating other resources where they can address their issues. Borrow from the dorm model of having older students work as community assistants specifically to help tenants solve problems and teach them about common rental housing scenarios.
Mom and dad are also tenants, in a way
Chances are when the student moved into the unit, mom and/or dad cosigned the lease, offering financial backing. Many parents are involved far more than simply signing the paper. You may have parents calling on behalf of students for maintenance, or maybe asking you to check on their child if he or she isn’t answering the phone. They may also call to complain because they think you’re not taking well enough care of their child.
Be patient with parents’ requests and have a policy for how you handle parents. While you want to be sensitive to the fact that parents are often the ones paying the rent, you also want to avoid violating tenant privacy. Appreciate that parents are coming from a place of concern and build ways to communicate with them about apartment happenings so you aren’t playing babysitter.
Students are social creatures
Students desire opportunities to spend time with their neighbours much more than tenants in multifamily housing. During this brief period in their lives, students are excited to meet new people and try new things. Quieter students appreciate the opportunity to make new friends.
Your property can offer various social activities both on- and off-site as an amenity for living there. Create a committee of staff members and residents who organize events for the community. Events at your property could include themed nights in the community room, starting a donation drive, getting a shuttle to a hockey game or organizing a game tournament. Your tenants will have plenty of great ideas. Always remember, free pizza will get any tenant to an event!
Sometimes, students are too social
The thought of living near and managing student housing in the area likely makes many people cringe. Stereotypes of all-night keggers with loud music and disruptive partygoers don’t make managing student housing as a part of life sound conducive for a quiet living – much less who you want in your rental property. While this isn’t true of all students, it is something you need to consider for the sake of the non-partying tenants and the property’s neighbours.
You’ll need to manage expectations around noise levels upon move-in. Weekday quiet hours are a good way to keep the property peaceful for hard-working students. With quiet hours, there needs to be a way to enforce them – if a tenant calls at 3 a.m., someone on staff needs to answer and handle the issue. While you want to keep the property quiet, keep in mind that students are paying to live there and want to enjoy themselves. Handle infractions on a case-by-case basis.
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They may not treat your property how you’d like
Because it’s one of their first times living on their own, and because it’s not their space, students may be less inclined to take as good of care of your property as you’d like. Of course, this can happen with tenants of all ages but seems especially common among carefree students with open schedules. They may be less worried about maintenance knowing they’ll be moving out in six months.
The security deposit is a time-honoured tool for deterring any damage. Request a high-security deposit and set clear expectations for how students will get it back. Automated systems for handling maintenance, like being able to submit a request online, make it easier for tenants to report any issues.
Their budgeting skills are new
Among many firsts, students are also new to budgeting and bill paying. Even if many are paying the rent with their parents’ money, they still have to remember to pay on time. You want to ensure you’re receiving your rental income promptly.
Offering an online payment option will allow students (or mom and dad) to pay as soon as they remember. Provide tenants with a clear guide of when rent is due, what the grace period is and what the fines and punishments are for late payment/failure to pay. Allow for individual or bedroom leases, so financially responsible tenants aren’t punished for a roommate’s behaviour.
You’re bound to the university’s schedule
When your business is built around the university, it means you’ll need to plan to fit its schedule. If everyone moves in September and leaves in June, it will impact your occupation rates, move-in/move-out resources and marketing plan. At least there is consistency though! You know what to expect during certain times of the year.
Once fall move-in is complete, begin your marketing campaign to get tenants for the following year. Push to have units filled before summer break when students will no longer be in town. Offer special incentives for students to move in during the summer when things are slower. On-site storage units for past/future residents offer another opportunity for rental income.
Renting to students is a sometimes challenging but always interesting investment opportunity. With good planning and input from other investors, you can add managing student housing property experience to your portfolio.
So, if you would like to get the financing you need to start managing student housing today, all you need to do is click the link below to book a free strategy call with us at LendCity. From there, we will help you find the mortgage that best suits a lifestyle that includes managing student housing.