If you own a rental property near a university or community college, then it’s likely that there’s an abundant pool of students who are looking for off-campus housing. You may have avoided this demographic because for any number of reasons, such as their lack of credit history, uncertainty during summer months, and individuality. It’s time for a new perspective on renting to college students, though, that views this demographic as a consistent pool of profitable tenants. Here are 5 things to consider when renting to students:
#1 Don’t Let Assumptions Drive Your Marketing Strategies
Some property owners assume they have a very good idea about what their tenants want and need in an apartment home. Rather than relying on intuition and observation — or even national research findings — property owners can benefit from designing a survey to capture both qualitative and quantitative metrics to really get to know their tenants. Students are more apt to move every year, so perform exit interviews to understand their motivations for moving.
Armed with information about an individual neighborhood or complex, owners have the tools to design marketing plans that will draw in qualified tenants as well as leasing or apartment features that encourage more stable, long-term renters. One example of this is the next item below.
#2 One Lease, One Due Date, One-way Rent Capture
Traditional thinking says everyone living in a unit signs a joint lease and rents are due on or near the first of the month. Forward thinking management strategies are open to creative ways to generate tenant satisfaction and lower vacancy rates.
According to a FinAid.org report, more than 86% of students took out loans to pay for their education during the 2007-2008 school year. Understanding that many students get a lump sum disbursement during the second month of a term, property owners might offer a discount for prepayment by semester, timed to coincide with loan disbursements. Other creative landlords offer discounts for referrals, lease renewals and electronic payments.
Many students prefer rent a bed or rent a room leases rather than one lease that obligates all roommates equally. This creative lease development option gives managers tighter control. For one thing, it’s easier to replace a non-compliant tenant with a more suitable resident without compromising the relationship with other unit residents.
#3 Building Institutional Relationships
Universities, trade schools and community colleges are excellent resources for property owners. These institutions work closely with students, visiting scholars and interim instructors to find and secure rental properties. Negotiating contracts with local schools for monthly or quarterly rentals often equates to higher per-month rates and access to a self-replenishing pool of desirable tenants. Another alternative contract design might include a low-fee exist strategy for summer months with a commitment to return in the fall.
#4 Replace Buzz With Interactive Engagement
It’s said so often that this next point is almost cliché. Young adults are socially connected 24/7. This fact creates phenomenal opportunities for property owners.
Technology makes it easier to engage with potential tenants. Tracking lead generation, for example, provides real-time information about marketing campaigns that consistently deliver qualified tenants. Web-based personalized, consumer-centric advertising coupled with interactive web design features that allow tenants to apply online create “touch points” to influence decision-making in your favor.
#5 Prequalifying Saves Time and Money
The truth is vetting young adults is tenuous. Many don’t have a long enough work or credit history to get a realistic picture of risks. Working with a management company, or using property management software services to screen applicants is more efficient and less expensive than doing this as a private owner.
Property owners who are willing to adopt a creative, forward-thinking perspective are more likely to capture the interest of qualified college students. AppFolio offers exciting new tools designed to help you reach out to this group while protecting your assets.