With a little care, some tough love, and an ironclad rental agreement you can be very successful.
This picture was featured in the Daily Illini, University of Illinois’ student newspaper, after a rowdy St. Patrick’s Day party at student’s home. When the property manger caught sight of the image they sent a kindly worded letter—“Dear tenants of 32 ½ E. Daniel, Congrats on making it into the Daily Illini. Now clean the ceiling.”
Let this be a warning!
Many of you look back on your college days with whimsy, fondness and perhaps a beer haze. Your memories are clouded with frat parties, all nighters, pizza boxes littering the floor and late night trips to the laundromat. So when a prospective tenant shows up, all of 19, and asks if your place is still for rent you cringe. Rightfully so, leasing to co-eds presents a host of challenges for rental property owners. But it is important to remember the pay-off—totally eliminating the student tenant population isn’t a very smart business move (especially if you own property in a ‘college town’).
1. Make friends with a really good, and I mean GOOD, handyman: Inexperienced renters or newly parent-less college students won’t understand the nuances of daily or long-term property care. Expect more than the average carpet stains, chipped paint, nail holes, and cracks in the tile or door jams. Student tenants will be ‘rougher’ on your property. They are also more likely to have flooding, drippy faucets, and backed up sinks and toilets. The knobs on dryer will fall of and you will be missing panels in the blinds, so budget your maintenance costs accordingly and make sure they know what damages they will be responsible for paying. Renting to co-eds will require you be diligent about doing a walk-thru when they move in and when they moves out. No exceptions!
2. Charge a premium for special lease periods: Signing an August to May lease means you’ll have to survive 3 months without a tenant, making your summer a little tight. But cushion the financial strain by charging a higher rent or offering the opportunity for sub-letting if your tenant plans on heading home for break. 9 month leases aren’t all bad! You can use the time to make the inevitable repairs and give the rooms a much needed new coat of paint. Remember: keeping the property in shape mans higher rent prices.
3. Don’t fall for puppy dog eyes: Layout a very well-worded and clearly stated lease. Make sure the tenant knows you will not tolerate late rent, unruly behavior, cop visits or extensive damage to your property. Give yourself some peace of mind by having them initial the clauses which provide for immediate lease termination.
4. Assume the worst: I know it goes against the old adage about assumptions but it is always better to be safe than sorry. While this is rare, assume they won’t know how to use the washer/dryer, unclog a sink, light a pilot, run a dishwasher or fix a blown fuse. Provide instructions on major appliance usage and any helpful tips you might have about the property. Do the ceiling lights use special watt light bulbs? Is the dishwasher green? Is the garbage disposal intolerant of certain things? Make note of them!
5. Get to know Mom and Dad: Chances are your new tenant is going to need a co-signer. Run background checks on both parents and child to ensure you are getting a quality tenant. Make sure the parents are able to financially commit to the property if something prevents the student tenant from paying rent or utilities. Rules about tenant screening don’t change because the tenant is 19.
6. Schedule regular visits: Getting to know your tenant is important regardless of age. So take some time and visit them after they move in. Address any concerns they might have about the rental and respond to them like you would any other tenant. We know it might be hard, but don’t discount their level of maturity because of their age. Like any other tenant, if you treat them with respect they will be encouraged to return it.
7. Remember friendship is fleeting: If you get a group of boys looking to rent together don’t assume they are best friends. ‘Friendship’ and ‘home’ are transient things for most college students. Protect your bottom-line and have each tenant sign a separate lease and collect rent individually. Tell John, if Tim and Mike move out he is responsible for their rent if he chooses to stay and include it in the lease. This will not only push them to think long and hard about whom they live with but it will encourage them to help you fill the vacancy quickly.
8. Think roommate contract: Encourage you tenants to talk out their concerns and living preferences from the very beginning. Point them to the university’s roommate policy and let them know they can download ‘roommate contracts’ on the internet. Living with someone can be hard and it might result in blowouts. Blowouts you want them to avoid.
9. Understand the security concerns: Renting to students means prolonged periods of vacancy. Robbers take note of the daily routines of students and many know when they are most vulnerable. An empty house over winter break provides a great opportunity to break-in. Consider making regular visits to the property when you know the tenants will be gone (let them know first) to make sure nothing is compromised.
10. Consider a property manager: If you don’t live near the property you might not be able to keep up with the needs of the tenants or the care of the property. Employing a property manager might help in the long run. They can respond to late night calls, deal with collecting the rent and processing an eviction should it come to that.
11. Bring the neighbors a bottle of wine: Living next to college students might not always be a cup of tea. So getting to know the neighbors will help you keep the peace and know if anything inappropriate is happening on the property. You can’t be there every day but the neighbors can.
12. Don’t forget you were young once too: Renting your property to college students is going to require patience! So be up to the challenge and do your best to embrace them. They just might prove all your worries wrong. And if they make a mistake remember—you were young once too!