We are pretty sure this question has played in your minds during the pre-planning of your property or whilst managing your property.
And sure, this article shows us all the reasons we should rent to students. But those are all ideal case scenarios.
In reality, there are huge complications that may cause mistakes when renting your property to students.
This is why you should painstakingly avoid these following mistakes:
1. Overestimating the Reliability of Students
Students are more carefree and lackadaisical, which means they lack responsibility at times. If they are financially independent without their parents, one issue with students may be the inconsistency in the rent payments.
It may take a few days, weeks or months to get your monthly rent in sometimes. Late payments represent carelessness, and that may be extremely concerning to an investor with a mortgage.
Solution: Now, don’t let this discourage you from renting your room to a student. The idea is to conduct regular, monthly tenant screening on students and parents and to be strict about the deadlines that rent payments must be received by. Screen the students’ parents and get their contacts, too. This is a tried and true tip that we have definitely a lot of experience from!
2. Thinking that lease vacancies will “resolve themselves”
Although the majority of leasing activities will occur months before school commences, a property rental has the potential to lay vacant once the school year concludes – which may lead to losses for you!
Because most student renters sign short-term leases of 6 to 12 months, it could be difficult for you to constantly have a flow of renters at your place. This effect is compounded if you live in a student property-dense area, when there are a lot of other options for students to work with. So, how to rent out a house, if you are in such situation?
Solution: Instead, investors should consider hiring a professional management service to oversee their property. Generally speaking, a third-party management service will deal directly with prospect and tenants.
This includes marketing the rental, finding tenants, collecting rent, handling maintenance and responding to complaints. This will ensure that your rental space will appeal to a greater audience of students, and that your workload is lessened. Then, renting becomes a completely passive activity for you. And actually, hiring such help is not necessarily expensive!
3. Not communicating cleanliness and safety to your tenants
This could potentially be disastrous. If your tenant doesn’t know that he or she has to perform simple tasks like regular cleaning, you may start to worry.
Basic activities like using appliances appropriately, changing a light-bulb, using a fire extinguisher or reporting maintenance issues may be a completely unknown experience for your tenant .
Solution: It’s imperative that you properly communicate to your student tenants about the maintenance they are responsible for and who to contact the second an issue pops up. Make sure there is schedule for tenants to do their work and keep the communication line open so that things are not being ignored until a really serious issue arises.
4. Underestimating Property Damage
If you don’t put in proper insurance for property damage, this could be disastrous for you financially and legally. Remember: this is the first time your tenants have ever lived outside of their parents’ house.
They are teenagers: young adults at most. Most likely, they will engage in impulsive, erratic and irresponsible behaviors, which could result in serious damage either to themselves, your neighbors or to your property.
For instance, your neighbor might complain of hearing noise blasts from a party they were not supposed to have; you might see graffiti on your lawn; your hundred-year-old grandfather clock may be gone too.
Solution: A credit report, personal references, and even parental contact should be considered when screening college students. A co-signer and maximal security deposit may be required to provide investors with some degree of confidence their house will not be destroyed.
Have you fallen victim to any of the above mentioned mistakes? Don’t worry, we learned it the hard way too. If you have just started your journey, we hope that this was helpful for you. Let us know if you have any thoughts or tips on how to kick off a student accommodation! Till next time…
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