Can students who are unemployed but on scholarship or get stipends they say they will use to pay rent? If so can I work with the school and directly receive payments from such a program?

Question

I have a young couple who are unemployed but say they receive money from scholarships that they would use to pay rent. Anyone heard of this? Any way to get this money from the school? They are young (probably no credit) but clean cut however they really don't meet any of my criteria. I am a newbie to the rental business I think it's obvious I (and they) are a bit nieve.

Roy N. · Answer

@Scott Stark We rent to lots of students and, I'll be the first to qualify it's not for everyone. They frequently have no credit history, little traditional income, are immature, irresponsible and self absorbed. That said, it can also be incredibly profitable and if you screen well you will have mostly grounded, {somewhat} responsible tenants. That and we usually get Mom, Dad or a Grandparent to be a guarantor. Here we are not allowed to accept rent further in advance than the next rental period, so we have to allow the students a little rope and the opportunity to be grown up and manage their own finances. We are also very punctual with: Rent due on, or before, the first; Notice to Vacate is served on the fourth (first offence) or second (recurring offence). If they are late, usually the mention of a call, or e-mail, to the guarantor gets everything flowing ... rarely do we have to ever place that call. So, if you are uncomfortable with students (Grad students being the easiest to manage), I'd pass and keep looking for other, more traditional, tenants.

Aaron Montague · Answer

Students make solid tenants. They are fairly easy to intimidate into good behavior. Just be, or have, a presence on a regular basis. I rented to students in Troy, NY for two years. I inherited two groups, and they were bad. The other 6 groups I put in were great. I had their parents co-sign on each lease. With the exception of gross kitchens, the places were always in good shape when I got them back.

Scott Stark · Answer

You people are great. Thanks

Elizabeth Colegrove · Answer

@Scott Stark Do they have a guarantor? Does Washington allow you to collect rent 6 months in advance? If they had a guarantor you have a good "feeling". I would give them a chance.

Michele Fischer · Answer

We are near a community college and run into this. One set of student brothers was great, the others have been awful. There is no guarantee that they will stay in school and keep qualifying for aid. Applicants who get their funds in chunks rather than regularly for any reason lose points in my screening, so they need to be stronger in other areas to be considered. Cosigner, great rental history, credit to protect, etc.

George Cooper · Answer

I have a friend who rents to students and he requires the parents to cosign and the background check is done on the parents. Lets face it students no matter how mature they seem, can really party and let the damage begin!

Scott Stark · Answer

Thanks for the input!

Scott Stark · Answer

Thank you all! Incredible feedback after only joining this site last night! My question regarding a lump sum for x amount of months is can I get them to sign a document that would be legally binding and immediate that says, "We will move out on _ date"? (unless they turn out to be dream tenants , get started making reliable income and want to stay).

Mat Lewczenko · Answer

When I was in grad school, I would just pay 6 months rent at a time when financial aid disbursements came out. I knew I was not an ideal tenant based on my "job" i.e. I didn't have one, so I knew I needed to sweeten the deal - I signed a longer lease and paid 6 months at a time. Worked for me at that time and I even got a discount on the rent.

Bill Gulley · Answer

If they don't meet other requirements, I'm not seeing that income is an issue, but if you're willing to overlook other issues, you need to change your requirements. Income should be and must be considered regardless of the source of funds for legal activities. The issue is that income must be reliable. You may not count pay from a new part time job if they have no history of part time income or child support being received on a 20 year old college student may drop off at 21, so that income is not expected to continue and it would not be counted. The amounts available to these students probably come with strings attached, most likely their grades must be acceptable, if they end up on probation funds could be at risk. As they get near a degree, a needed class may not be offered and they may need to wait for another semester, that could put them under an hourly class requirement to qualify. So the issue is the likelihood of income being continued to count it. You need to have a chat with the school, get an authorization from the applicant to verify this matter. It's all about a comfort level with a SFD rental, if it's an apartment, stick close to your guidelines as their neighbors can't be viewed differently, treat all the same. A SFD is a little different, no other tenants to compare to and you can always change your requirements, to some degree. :)