Renting to College Students (24k opportunity)

[Drake Espenlaub]

A friend of my parents has a son in college, and came to me asking if I knew of anything to rent close to the school. I have a rental I am finishing up, but have put nicer finishes in it planning to not rent to college students.  These students will be freshman, and are "planning" to rent together for 4 years. Having been young at one time, I know this is not a reality. However, I do see it happening for 1 year.

It is a duplex 4/1.5 down and 2/1 up. Fenced in side yard, single car garage in back, parking for 4-5 cars. 

In talking to her she had said her son and his buddies are looking for a place to rent, they had all planned to take extra money from their loans and pay their rents a year in advance.  I was unsure about renting it to students because of the finishes I chose. Knowing her son fairly well, I know he/they will be partying in the house, likely to do 2-3k worth of damage. However she said there are 4 of them, they are all likely willing to pay for a years rent up front. Question being.

In the 4/2 - If you can get $500 a head for a year from each student up front (essentially 6k per student) $24,000 for the year in one payment, knowing it will be trashed, are you doing it? 

2. This will likely hurt my chances for tenancy upstairs in the 2/1, unless it rents to students as well.

3. Are you just adding eviction clauses in the lease that have to do with noise complaints, unpaid bills, as well as taking a large deposit for damages?

4. Am I an idiot if I don't do this?

The 4/1.5 would likely rent for $1100/mo with the 2/1 around $750.

I am leaning towards doing this, I am just trying to weigh my short term advantage vs the longer term set back.

Thanks

[Charles Patterson]

I used to live in a college town and currently have some investments there... so lets go over a few things.

1.)  Ordinances?  I know that I always check the ordinance mapping before purchasing anything so that I know who I am allowed to rent to.  If your house is in a residential area that is set up to not be college student renting friendly then be careful because the neighbors could turn you into the city and then fun with that.

2.)  You are approaching this right in taking into account that there will most likely be damages.  If you proceed then take a video of the property the day before they take ownership (or day of) and post it to youtube and don't make it publicly broadcasted/searchable.  If you ever have to provide proof of condition then you can always refer to the link as video proof.  This is in addition to your move in report.

3.)  HAVE THE PARENTS SIGN THE LEASE AS WELL!!!! do your background check on each tennant as well as their co-signing parent.  If you have damages then be sure to inform the parents of the damages and additional moneys owed.  This will keep the parents on the kids a bit (but damages will occure)

4.)  Do your walkthroughs more often.  For college rentals I do mine quarterly rather than twice a year.  If something is damaged and needs fixed I fix and bill (again, copying the parents).  This allows you to let them get that realization that they can cause themselves financial strain.

5.)  Keep in the usual eviction clauses, you might need them.

6.)  I like to have each student have their own lease.  View it as them renting out the bedroom with the unit being common areas.  This way if one wants to go they can go while the others stay on.

7.)  Utilities in their name not yours!  Time for them to learn some responsibility.

8.)  If one unit is college students, all units are college students.  That just takes down on headaches.

9.)  Be ready for pets and if you don't allow them to be a firm NO.

If I can think of any more pieces of advice I will post them.  Renting to college students can be very profitable as you have already ran the numbers on.  But they can be harder on the house as well.  Remember that these "Adults" are still "Kids" and are now learning how to function by themselves in society.  BE FIRM.  And as Brandon says all the time, "Train your tenants."  They are now away from home and rather they know it or not they are seeking structure and rules.