Investment in rented properties can be highly profitable if you have steady income flow from the tenants. But, in cases of rented houses, getting a good tenant and keeping them for a specified period of time can be problematic. Therefore, investors keep an eye on tenants who occupy the property for a particular period of time because it opens up the avenues of getting new prospects with higher rental rates.
Investors have also paid very close attention to renting their properties to college students in the recent days. There are three major reasons for this change:
- There are many college students who look for rented houses so that they can move out of the noisy dorm of their hostels and continue their studies in peace and enjoy the comforts of a home.
- Higher rents can be charged to college students who generally move in with other students and share the monthly rent.
- The investors find it easy to buy a property close to educational institutions, such as colleges and universities, with very affordable prices and receive considerably higher rents from the investment.
Despite such changes, there are a number of investors who think that taking the decision of buying properties in college towns is a difficult one. Therefore, if you are planning to rent your property to college students, you need to know the advantages and problems associated with it.
The Advantages of Buying a Property in College Towns:
1. No Property Advertisement is Required:
College students get to know about the surrounding place from their friends. Therefore, if you have managed to pull in one college tenant for your property, you can be sure that there would others queuing up to move in without any promotion or advertisement.
2. Good Flow of College Tenants:
Owning a property in college town also means that you will have many college students who are interested to reside in your rented house for a lucrative rental charge. Moreover, when their educational course is over, you would soon get new group of students as tenants which would ensure a stabilized flow of income for you.
3. Lesser Property Damages:
Quite contrary to the popular belief, the students nowadays do not find the time to party in their rented apartments. Moreover, they often get involved in part-time jobs so that they can sponsor their studies. The tendency of students to stay away from the rented properties for a long period of time means that you would have lesser depreciation of asset and higher returns.
If you are not sure about the nature of the college tenants, you can ask for their Curriculum Vitae and check the activities they are engaged with. Thus, you can choose the college tenants of your choice.
4. Proper Lease Agreements:
Unlike other tenants, college tenants come up with their guardians or parents. Therefore, you can ask for the signatures of both the college tenants and their parents on the lease agreement. This makes the parents responsible for the rented property which ensures that no agreement clause is broken. Moreover, you receive a direct point of contact for future convenience.
The Disadvantages of Having College Tenants:
1. No Permanent Income or Rental History:
Most of the college tenants do not have any steady income flow. Some of them work for part-time jobs but they are not interested to spend it for paying the house rent.
Therefore, the best option for you is to have a guarantor in the lease agreement so that the rental responsibility becomes shared.
2. Lack of Responsibility:
College students do not cause damage to the rental property intentionally but they might refuse to assume its charges in pressing circumstances.
Therefore, the most viable option for you is to seek renters insurance from the college tenants so that you can receive some compensation in case of property damages. You can also provide them with good tenancy tips so that they feel interested in taking care of your property during the term of the lease agreement.
3. Roommate Problems:
College tenants can develop problems with their roommates which disrupt the peace of your house. Moreover, this can also damage the reputation of your rented property.
Therefore, you need to make a strong lease agreement which addresses such roommate issues with stringency.
Make the Best College Town Investment with Us:
Here, at Rincon Ventures, we understand your investment goals and requirements. Consult our Real Estate experts to know about the best college town plans and find out how it can be profitable to you. We would also assist you in making a solid lease agreement and safeguard it with necessary actions and measures. Visit us today!