Although there are risks involved, renting to students can be highly profitable. In addition, they comprise a niche market that is never exhausted whether rental property is performing favourably or not. There are a number of reasons for this. Firstly, many students leave the areas that they grew up in and attend university in another town, city or even country. They are however in no position to buy property, and so renting is their only alternative.
Students who attend university in the same place as they grew up often feel the need to leave their parents homes in search of independence. Similarly, they are unlikely to be able to afford to purchase property and will seek out rental properties in the area.
In short, rental markets will always flourish in areas where there are students. What remains, is for property owners to decide whether or not to let to them. Provided that you take the risks into account, students can be a highly profitable market.
Recognising and Overcoming Rental Risks
There are risks involved in renting to students however, with careful screening and the right precautionary measures, these problems can be addressed and solved. Moreover, when one looks past the student stereotype, the risks faced are no more or less than those that those presented by renting to any stranger.
Key concerns include potential damage to the house, the possibility that they will fail to pay rent or for services such as lights and water and problems around noise. Renting to a group is also challenging because there are questions around who signs the lease and is responsible for infringements of it. While it is not ideal for one person to be held responsible for the lease as a whole, it is also difficult for landlords and managing agencies to chase many people, as opposed to one.
Solutions to these concerns include insisting that a parent sign the lease and that the parent agrees to be responsible for the transgressions of the group as a whole. Increasing the value of the deposit to include a services deposit is also a good idea. It is also important to ensure that a thorough inspection of the house takes place prior to occupation, as is recording the results of the inspection and having them signed by all parties. Conducting regular inspections is also an ideal way to check on adherence to the lease. If all of these seem like too much hassle for you to manage alone, employing the services of a reputable agent with experience with rentals may be a good alternative.
Assess the Suitability of your Property
Once you have decided that renting to students is worth a try, the time comes to establish whether or not your property is suited to student rentals. There are two factors that are important here.
One is whether the accommodation on your property is suited to student living. The other is whether or not your property is in the right location. The latter issue is one of convenience - because of the stage they are at in their lives, students need convenience. The most successful rental properties are those geographically situated near the city s tertiary institutions, as well as providing easy access to nightspots, shopping centres and transport hubs. Rental accommodation that meets these criteria will yield a higher return on investment than properties that don t.
Suitable types of accommodation vary from flats and townhouses to large family homes, suited to communal living. Furnished homes are a popular option because students are looking for hassle-free alternatives. A fully equipped home and kitchen also facilitate higher rental income potential.
Profit from Student Rentals
Property rental is profitable for a number of reasons. The first is that, provided you cover the running costs on the property with the rental, you will be making a profit. This is because the value of property will increase over time. Few people however, rent to simply cover their costs, and most property owners will profit additionally from the rental that they receive. There are a number of ways to ensure that this is possible with student rentals. The key to this lies in the type of establishment that you wish to run, as well as the manner in which you let it.
Landlords can be as involved or uninvolved in rentals as they choose. For those wanting to keep an eye on their property, direct hands-on management may be the way to go. Many parents with children on the brink of leaving home are concerned about their offspring s ability to fend for themselves.
With a chronic shortage of residence rooms at universities, many seek out hostel-type homes with a matron to keep an eye on their precious children. This role is not for everyone and it comes with a great deal of responsibility. However, it does allow owners to liaise with the students parents, to live on the property and to set rules for occupation. Also, the fact that there is supervision in the house allows homeowners to charge more rent, as well as making the set amount one that is all inclusive ensuring that services get paid for.
For landowners wanting to take a more indirect approach to student rentals, there are two alternatives. One is to rent the rooms out individually at a predetermined price and the other is to rent the house to a group of students as a whole. There are advantages and disadvantages to both tactics. The advantages associated with the former include the ability to make the amount an all inclusive one. However, it does present the problem of having to keep track of numerous individuals. The latter alternative may yield less profit overall. However, they may be less of an administrative hassle in the long run.
To reiterate - renting to students can be risky, although arguably no more risky than renting to any other previously unknown tenants. It can however also be very profitable, particularly when rental markets are low and there is a shortage of tenants looking for homes. Profitability depends on the way in which you decide to lease your property, as well as its position and size.
Renting To Students: Risks Or Returns
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