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When you think about university students, words like “reliability” and “security” may not be the first things that come to mind. Especially if you’re a landlord, you’re more likely to have visions of Animal House appearing in your head—it’s not the sort of picture that gets you super excited about renting to a bunch of 18 or 19-year-olds out on their own for the first time!
While it’s true that student tenants present some unique challenges—the partying stereotypes exist for a reason, and students may need more help with some of the basic curveballs presented by a space that’s not their parents’ home—they also don’t deserve the bad rap they might get from landlords who had one bad experience (or no experience at all). In fact, if you go into it with your eyes open and understand the ways in which students might be more appealing than traditional tenants, you may find yourself looking to expand your holdings just so you can rent to more student tenants!
However, before we get started if you would like to learn more about how to finance student rentals, click the link below to book a free strategy call today.
What’s the Problem with “Professional Tenants”?
Although it may seem like traditional renters would present a safe opportunity for rental income, recent developments have called this belief into question. Especially in Ontario, with its extremely lenient tenant laws, it’s possible for tenants to work the system by taking advantage of eviction backlogs to live rent-free until they’re finally evicted. In fact, as of last summer, Small Ownership Landlords Ontario (SOLO) alleged “mom and pop”-type landlords had lost upwards of $1 million as a result of professional tenants gaming the system during the COVID-19 pandemic.
Discover How To Deal With Difficult Tenants With This Step By Step Guide
Why Student Tenants Are Preferable
At first glance, it seems obvious enough: it’s better to have renters who stay for years and with whom you develop a good relationship than to have a constant cycle of one-year leases with endless marketing and the uncertainty of whether or not your property will actually get rented.
Somewhat paradoxically, the transitory nature of students is actually a good thing for landlords. While ordinarily you wouldn’t want to deal with quite so much turnover, the fact that student tenants come and go on a reliable schedule—their housing situation is largely dictated by the school calendar, after all—makes it easy to predict cash flow and schedule property improvements during downtime.
Where students really present an advantage over traditional renters is in the realm of actually paying rent on a regular basis. Although most student tenants aren’t flush with cash, they recognize the importance of their education and tend to prioritize ensuring their finances are in order so they can continue in school, and this includes having sufficient funds set aside for rent.
On top of this, students are often required to have a parent cosign their lease to guarantee rent is paid. On rare occasions, if a student is unable to pay rent due to an unexpected circumstance, having the ability to contact the parent for payment enables all parties to resolve the situation quickly and without much disruption.
Finally, the fact that student properties are rented by the room offers an additional layer of financial security to the landlord. Whereas a traditional tenant failing to pay rent can result in the property bringing in zero income, some student tenants falling behind doesn’t have the same effect because the other renters living on the property are still paying.
Pro Tip: Make Sure You’re Actually Renting to Students
While owning a student rental property can be a reliable source of income and offers a level of predictability quite unlike that associated with traditional renters, there are still some things you’ll want to do to protect yourself as a landlord:
Make a photocopy of their student ID during the application process to confirm you’re actually renting to a student.
Make expectations clear in the leasing agreement. Student tenants need to know the rules of the property, what they’re responsible for as tenants and whom to contact in the event of a problem.
Provide move-in and move-out checklists with clear instructions so these hectic days have some structure and clarity. Include answers to frequently asked questions and step-by-step procedures they should follow to ensure a smooth moving day.
Although student tenants can get rowdy, as a group they tend to understand the importance of living on their own and being responsible and accountable for their actions. As a landlord, you’re in a unique position to help them grow and learn how to care for their space. When you take the time to develop a good relationship with your student tenants, the effort can pay off in a smooth and mutually beneficial experience for all parties involved. Don’t get hung up on the stereotypes—you may quickly find yourself preferring student tenants to traditional tenants!
For access to a FREE student rental property analyzer and to learn more about the benefits of student rentals click HERE or email Gillian HERE Alternatively, you can click the link below to book your free strategy call today.