Students can be fantastic tenants and there are certainly many benefits to renting to this market. There are of course a few drawbacks that may put landlords off, but as long as you screen your tenants sufficiently and know what to expect when renting to students, you should be in for a smooth and stress-free tenancy.
Student friendly housing in university and college towns is in high demand and there is usually a rush to secure housing each year. This means that you are unlikely to ever be short of applicants, so long as you are offering somewhere functional and affordable.
Due to high demand, advertising costs for your property are likely to be minimal as word of mouth in the student community is very effective. Additionally, when renting to students you are generally guaranteed nine months of income during the school year and there will always be tenant’s ready to take a room should any of your tenants drop out.
14% of landlords let to students and most never encounter any problems. However, it is not all positive. There are a few downsides to renting to students. They generally only want short term lease agreements during university term times, leaving the summer months difficult to fill. Their lifestyle can also be an issue as it is safe to assume that in many cases there will be parties and noise, possibly resulting in damage and complaints from neighbours. They are also likely to be inexperienced in both living away from home and managing their own money. This could lead to problems with damage and cleanliness within the property and issues with them keeping up with the rent payments.
It is important to follow the usual screening process when dealing with students, however you may come across issues when running a credit check. It’s not unusual for students to fail credit checks and this is not always a sign of a bad tenant. Bad credit has a heavy stigma attached in the world of renting, however it is fairly typical of young people who could well be perfectly suitable tenants. This could be for a number of reasons, such as having never borrowed money, used a credit card or paid bills.
Instead, it may be more beneficial to ask possible tenants to provide a co-signer or guarantor who will be able to pass a credit check and pay the rent if the student cannot. Similarly, it is a good idea to get solid contact information for the student’s parents or guardians in case you do encounter any trouble with late payments or behaviour. They are often a good option to turn to resolve the problem.
It is advisable to screen students in the same way you normally would. Use your common sense and ask all the relevant personal, practical and financial questions, such as when their university term begins and ends, whether they smoke and how many people will be living in the property. Be sure to meet them in person and show them around, taking note of their attitude and manners. First impressions are important and this should filter out any potentially unsuitable applicants.
Although landlords are free to choose their tenants, there are certain questions that you cannot legally ask them. These include anything that could be interpreted as discriminatory, such as disability, national origin, religion and race.
As much as you will need to trust your student tenants, they also need to be able to trust you. It is a good idea to become a university approved landlord. This is easy to do and a good way of attracting the right kind of tenants, who are also looking for a secure and trustworthy agreement. Good student tenants want to know that you are not a cowboy and often need a bit of hand holding as it may be their first time renting. The more you can put them at ease the better.
Look out for red flags
There are things to look out for when screening potential student tenants, both within the application and in person. If they cannot provide you with any references or if they omit information on their application then you should be wary. People who have nothing to hide, hide nothing and a good tenant should be able to answer all of your questions without hesitation.
Similarly, look out for students that appear nervous about any background checks you may be carrying out or give you long and cultivated stories about problems with previous landlords. They could also potentially be a problematic tenant.
Renting to students can be a profitable and valuable market and student renters can make great tenants. Be thorough in your application process to ensure you find the right fit for your property and you should be in for a simple tenancy.