July 13, 2021 Rhenti If you have a vacant unit that has been sitting on the market for months,...
Renting to students: The pros and cons
If you own a home close to a university or college campus, then you may have the opportunity to rent to students. This is a great way to make money and like any situation, it comes with its own set of pros and cons. See our list below for what you should consider when renting out to students and check out our full article on marketing to student renters.
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Pros of renting to students:
1. Lots of students seek housing
After living on campus in their first year, most students move into a house or an apartment that is close to school. This creates a high demand for housing, and with new cohorts entering the school each year, there are always students looking for a place to live. The end of summer and fall is the most popular time of year for students to look for housing as they return to classrooms.
2. You may be able to charge a few hundred dollars more per month
Students tend to live together in one apartment with multiple rooms. With housing in high demand and more than one student contributing towards the rent, you may be able to charge more when renting to students, since the rent is coming out of multiple budgets, rather than one.
3. Students are less likely to take advantage of landlords
We’ve all heard horror stories of tenants who learned the ins and outs of tenancy law, and found a way to live somewhere rent free for many months by taking advantage of the system. The good news is students are far less likely to do this. Rhenti has conducted research on this topic and what we’ve found is that 1. students don’t know the rules and 2) since they don't see themselves living at their apartment for a long time, they don't think it's worth it to encounter any landlord conflict.
4. You can work with the post-secondary schools near you
Many universities and colleges have housing services that you can work with to find good tenants. An example of this is the University of Toronto’s housing services, which have their own off-campus housing finder to help students find a home and roommates.
5. In town for 3+ years
Students do tend to move around, but in most cases, they will be in town for school for at least three plus years. Oftentimes, especially with shared housing, at least one of your tenants will stick around, and they’ll make sure the rest of the vacancies in the home are filled, so they can choose who they live with. This leaves you with less work trying to find tenants who are a good fit. Just make sure you’re keeping track of who lives there and that new leases are signed.
6. Reliable payments
It is not uncommon for students’ parents to pay for their rent and co-sign their leases. Sometimes they will even pay a full year’s rent up front. Alternatively, students often have access to student loans to help pay for their rent. Either way, they can be very reliable when it comes to paying on time and in full.
7. Less picky
Students are usually more laid back with regards to their housing as they tend to be focused on school and socializing. As a result, you don’t need to concentrate as much on the aesthetics of the home you are trying to rent out, and the tenants you end up with are much less likely to complain about small imperfections.
Cons of renting to students:
1. Lack of experience taking care of a home
Many post-secondary students are living independently for the first time. This means they may not be the best at cleaning and maintaining the home, which could potentially lead to rodents and pests. Students tend to be less invested in treating rentals well, and are more likely to cause damage unwillingly because it is a short-term arrangement for them. They may also delay flagging issues which could lead to bigger damages. It’s good to talk to tenants about their responsibilities, and let them know what types of issues need your urgent attention e.g. leaks or signs of plumbing issues.
2. Tenant turnover
It’s not uncommon for students to rent a space for a year and then move on to their next apartment. This may leave you finding new tenants and having to repair and clean the property in a short amount of time. However, there is usually no shortage of applicants to quickly fill the vacancy and when you use Rhenti, you can make sure you choose the right renter.
3. Noise complaints/damages
Students do have a reputation for throwing parties that have the tendency to get loud and sometimes result in damage to the home. You may have issues with neighbours complaining about the noise, or even some of your own tenants if you’re renting out multiple units. You don’t want other tenants driven out because the adjacent units are too disruptive. Read our in-depth article on what to do if your rental property is damaged.
4. Lack of rental/employment history
Since students are often young, they may not have had a job or rented a place before. As a result, it is hard to get a sense of their reliability as a tenant. Your best bet is to have a parent co-sign the lease, that way if the student doesn’t pay the rent, it falls on their parents.
Not sure what you can ask when screening potential tenants? Check out our article on what a landlord can ask for on a rental application.
5. They’re away during the summer
Students often move back in with their parents during the summer. As a result, they may be hesitant to sign anything beyond an 8-month lease. There are two ways you can compensate for this:
- You can encourage them to sign a 12-month lease with the understanding that they can sublet during the summer months
- When deciding what to charge in rent, think about what you wanted to make that year and charge it over an 8-month period instead.
The blog posts on this website are for the purpose of general introductory information. They can’t serve as an opinion or professional advice. Speak to a professional before making decisions related to your circumstances.