If your rental property is in the middle of a college town, you might be wondering if it’s profitable to rent to college students. Do college students have time to work a full-time job to pay for rent, utilities, food, and other living expenses
These are valid questions. You never want to rent to people who can’t afford the rent. However, college students can be a profitable market for your investment properties under the right circumstances.
Can college students pay the rent?
College students have a reputation for being thrifty, but that’s because they spend the majority of their income on tuition, housing, and books. While they’re happy to live in shared, cheaper accommodations, they have no problem paying for whatever housing they can find and afford. In fact, 55% of U.S. college students live off-campus in normal rental houses, and 23% live in off-campus housing specifically built for college students.
Sometimes college students generate higher rent
It’s entirely possible to collect higher rents for your properties by renting to college students. The trick is renting by the bedroom and providing individual leases to each occupant. For example, a 3-bedroom house you’d normally rent for $2200/month can net you $2550/month when you charge $850 per bedroom. The cost per bedroom is lower than the overall monthly rent, which makes it more affordable for college students.
There are benefits and drawbacks to renting by the bedroom, however. If your property is in a college town, you’ll have an easier time keeping the unit occupied. If your property isn’t near a college, you’ll probably find it hard to keep all the bedrooms rented to college students. Granted, you could rent individual bedrooms to people who want to rent a room, but it still might be harder to keep your bedrooms occupied.
Before renting by the bedroom, the biggest drawback to consider is the potential for damage. Any tenant can cause damage, but when you’re renting to many tenants on a short-term basis, there’s an elevated risk of damage, especially if the tenants don’t get along.
College students can qualify just like any other renter
It’s not a bad idea to rent to college students, provided they qualify just like any other renter. Sometimes their parents will pay the rent and you won’t have to worry about whether or not they have a job or a high credit score. On the other hand, some college students already have an impressive credit score and a reliable source of income.
If you’re on the fence about renting to college students whose parents will pay the rent, talk to your property management company such as GreenResidential.com to find out if that type of rental agreement is too risky. While you can’t deny college students the opportunity to apply for your rental property, you don’t have to accept anyone who isn’t able to pay their own rent.
A college student who has no direct financial obligation to their landlord might not be the best tenant option. Some tenants ignore their responsibilities when they aren’t financially responsible for potential damage. For instance, a tenant whose parents pay the rent might throw parties that result in damage to your property, or they might not report necessary repairs.
College students value affordability and location over amenities
Renting to college students can be profitable if you’re not trying to sell them on high rent to cover a truckload of amenities. College students aren’t looking for a fully connected smart home, walk-in showers, and fancy stainless-steel appliances. They just want a place to live and study that has all the basics covered.
If you can cover a college student’s priorities, you’ll be profitable. Here’s what college students really want in a rental home:
- Affordable rent. If their parents aren’t paying the rent, college students are happy to split the rent with several other people. If you’re open to renting to multiple people, you could actually collect more overall monthly rent by renting each bedroom individually.
- Proximity to their school. College students don’t want to drive long distances to get to and from school, especially since they’ll be spending a large amount of time on campus. If your rental property is close to a college campus, you’ll be profitable renting to students.
- Fast access to public transportation. Some college students don’t drive because they don’t want to deal with car insurance, gas, and parking. Others just don’t own a car. Some schools even discourage or ban freshmen from parking on campus. A rental property close to a college and public transportation is likely to be in hot demand.
- Walking distance to shopping and dining. College students love walking into town to meet their friends and share a meal.
- Wi-Fi access. Internet services can be expensive in some areas. If you can provide internet service and set up a router for Wi-Fi, you’ll be profitable renting to college students.
- Access to laundry facilities. College students care about how they look and want to have clean clothes. If you don’t provide a washer and dryer in your rental property, make sure you’re close to a laundromat. If not, you’ll need to provide a washer and dryer.
- Safety. A rental property in a safe place is always going to be a priority for just about everyone. This includes proper door locks, a secure mailbox, and a good neighborhood.
College students are easy to please
It doesn’t take much to make a college student happy in a rental unit. College students can be just as profitable as any other tenant as long as you provide the basics like heat, hot water, security, electricity, good plumbing, laundry, and a decent shower.
If your property is in a college town, you may want to consider renting exclusively to college students by the bedroom with short-term, individual leases. However, if you choose to continue renting to tenants as usual, at least consider the college students who apply. They just might turn out to be a reliable source of income.