What real estate investors need to know about renting to college students.
College students are considered a high-risk market for real estate investors. When you imagine raging college parties hosted in a broken-down apartment, it’s easy to see why this is such a risky proposition. However, it’s important to remember that not all renters fit this stereotypical image of a college student. In fact, renting to college students can be very lucrative if you take the time to find the right tenants and take other measures to mitigate your risk. According to your commercial realty advisors, here what you need to know about renting to college students.
Demographics
Today, nearly 74% of college students are classified as “non-traditional.” This means that one or more of the following are true:
- They are financial independents
- They have a child or dependent
- They are a single caregiver
- They do not have a traditional high school diploma
- They delayed their postsecondary education
- They are enrolled in school part-time while working
So, what does this mean for real estate investors? Well, the students who fall into the non-traditional category are more qualified to rent. Usually, they have a source of income, or a credit or rental history—characteristics that make them less risky to rent to.
Increased Demand
Real estate investors should also know that there is a rising demand for college housing. According to the New York Times, about 87% of college students live off-campus. With over 16 million students looking for affordable housing and with a high annual turnover, this means that there will always be a high demand for rooms in college towns.
Setting Clear Expectations
When renting to college students, it’s important to understand that it may be their first time renting. This is why it’s important to set clear boundaries and rules for them. For instance, when meeting with prospective renters, you should discuss house rules in-person. For an added layer of security, consider adding your rules to the leasing contract. Another way to mitigate your risk is by requiring college renters to have a co-signer on the lease. Co-signers are responsible parties who agree to pay rent if the tenant is unable to. Making this a requirement for your college renters ensures that you do not lose money on irresponsible tenants.
This is what your commercial realty advisors have to report on renting to college students. Interested in staying up to date with the latest real estate news and tips? If so, then contact the experts at California Commercial Realty Advisors, Inc. Our dedicated team is eager to assist you with all your real estate needs today.
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