Advantages and Disadvantages of Renting to Students in College

Property Management Blog

Towns where colleges are nearby are very favorable to investors who want to earn and generate healthy and stable revenue streams of renters. A Forbes’ article stated that comparatively in Indiana USA, the percentage of renters is 7% comparatively more where there is a university.

Although renting out to student is a risky business but the landlord can put proper safeguards to and generate a stable and profitable business. Here are both the pros and cons of renting out to students.


Dependable Revenue Stream

In areas where students’ population is high (20,000 to 50,000) and goes up to 25% of the total population of the county, there are many freshmen who move out of on-campus dorms and want to start living outside the campus. This results in stable flow of tenants each year.

Stable Income

Despite deteriorating economic condition of the country, the admissions colleges and universities increased and market for rented properties stayed strong and prices went up as the demand increased. Another reason for this stable income is the fact that many of the students were assisted by their parents to pay the rental charges so the landlords didn’t have to rely only on the tenant’s employment to collect the rent.

Easy to market properties:

With such high demand for properties available for rent, landlords needed not to spend a lot of money on marketing campaigns and were able to spend this money saved to other creative and lucrative tasks. Availability of public transport, proximity to the college and walking distances to basic amenities were enough to attract potential tenants. As most of the student searched for properties online, landlords and investors only focused on being present on the web and that’s it.

Renewals made easy:

Graduation usually takes 2-4 years to complete; this made it very easy to renew the rental properties. Just keeping the knowledge base of the students and sending tenancy renewal contracts were sufficient to bank this opportunity.


Background Check

Every landlord has a predetermined criterion when selecting a tenant. For students it might be difficult to show their credit rating because of young age. For those who are even working part-time, their income might not be enough to fulfill the criteria. Therefore, it becomes very difficult to verify that whether the tenant will be a responsible on or not.
This can be mitigated by involving a guarantor that the landlord can trust.

Wear and tear

Students at such young age may not understand their legal or otherwise ethical responsibility to take care of their rental property. They are more vulnerable to wear and tear that exceeds the normal damage and cleanliness of the property. This is another risk associated with renting out property to college student and can be mitigated by a strong lease agreement providing for wear and tear beyond normal damage.

Conflict between roommates:

Another problem that stems out of immaturity and young age of students is the conflicts that develop by living mutually in a single house. These situations are sometimes so worse that landlords must step in to mediate the conflicting situation and may result in a student leaving the rental property before the end of the lease term.


For almost 90% of the students, this is for the first time they are not living with their parents or on-campus staff taking care of their dorm rooms. Simple cleanliness routines and issues like properly maintaining the property are often ignored by the renters. A well-conceived agreement and a strong initial deposit is all the landlord need in case situation gets out of hand.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty. 

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