How Will Coronavirus Affect Student Rentals in 2020?

Coronavirus has created a huge amount of uncertainty in property markets across the country. With university closures and students returning home, the student rental industry has been one of the hardest-hit by the lockdown. Assuming the school year resumes in August as usual (and that’s a big “if”), what does the future hold for the student rental market, come autumn 2020?

Let’s look at some of the key trends that are likely to impact the market for the rest of the year:

Distance Learning and Online Classes

The uncertainty of whether or not classes will resume in the fall leaves landlords and students both in a very precarious situation. Universities are already thinking about switching to virtual learning for fall semester this year, while others are considering pushing back the start of classes to as late as January 2021.

If students decide to stay home, rather than lease in their college town, or if they break their existing leases early to move back home, we can anticipate student rental vacancies and lease breaks to soar higher than ever before.

However, fewer students will be traveling abroad for exchange programs in the near future, too, so this could slightly increase demand for local student rentals.

Flexible Tenancy Agreements and Payment Terms

In college towns, like Boston, most landlords usually pattern tenancies after the school calendar, so there are many landlords who have still been able to collect 100% of the rent from students who were enrolled during spring.

The main problem now is the upcoming semester, when landlords will likely have to readjust tenancy agreements, depending on universities' decisions regarding term start dates. It’s a waiting game at this point. Either way, landlords need to start planning ahead. Anticipate cancellations, consider what your options are, and be flexible when negotiating terms with tenants.

Students Subletting their Unused Off-Campus Housing

As more students rush to move back home, there’s a higher chance that they may try to sublet their unused housing to other tenants. So if you don’t allow subletting in your properties, be hyper-vigilant over the coming months, or perhaps consider restructuring your lease to give yourself control of the subletting process. Most student tenants use social media to advertise sublets, and the last thing landlords need right now is an unscreened tenant living in their home, whom they did not approve.

Students Moving to Universities Closer to Home

Another long-term consideration is the ongoing impact of social distancing concerns, especially within multi-person student dwellings. In these types of properties, self-isolation is a lot trickier (if not impossible), and could pose health and safety risks which students are keen to avoid.

This could lead to an increase in demand for SFRs or single-occupancy apartments amongst student renters who can afford this option However, new college students may also simply decide to apply to universities that are closer to home, rather than risk living in a shared space, so this could cause rental demand to fall in college towns.

To help allay these concerns, a good strategy is to be very transparent about disinfection, or any other health & safety measures you’re implementing, to comply with the CDC’s guidelines on preventing transmission.

There’s still a huge amount of uncertainty over what the future holds for student rentals, so make sure you know what the schools in your area are planning, so that you can adjust your strategy accordingly. This will only be a temporary situation, but it’s still essential to know what your tenants are planning to do, so you can plan for timing your lease for the start of the next school year, or consider temporarily pivoting to a different kind of tenant, if possible.