Renting your property out to college students can be a handful, but also very lucrative. Generally, if they rent long-term, new tenants will need to be added to the lease as their roommates graduate. While this is an additional commitment, catering to college students provides a steady stream of tenants, as long as they renew their lease. To maintain a continuous stream of income through college tenants, consider this new approach to renting out your properties.
Rather than renting your three-bedroom, two bath property as a whole, why not split up your rental into individual units? There are a lot of benefits for splitting up your rental’s rooms and making them individual rooms for lease.
- You’ll be able to charge each individual room rent, which will allow you to gain more gross income.
- You no longer need to be concerned about your property being fully vacant for months.
- If you have a vacancy, you will only lose money on that room’s rent. During a vacancy you can depend on the monthly income of the other rooms.
While this property arrangement isn’t common among landlords, it isn’t completely uncommon. Individual leased rooms with common spaces like the kitchen and bathroom is similar to dorm rooms and some rented room situations. In fact, college students (and even many young millennial workers) will be especially comfortable with the different rental setup. Rather than frantically searching for a new roommate when another leaves, or stressing over a bad roommate’s rent, each tenant will have their own lease and will be responsible for their own rental agreement.
To protect yourself, each lease should define where the shared spaces are and what each tenant is responsible in terms of maintaining the shared space. It should also state what utilities are covered by you and how they are divided between tenants. You can do this by having a base utility fee built into each tenant’s rent, and then splitting anything over that amount between your occupants.
Finally, it’d be wise to define some house rules you can keep posted in the primary common area. The majority of the rules should involve the treatment, maintenance, and repercussions if common spaces and rooms are damaged, but you’ll probably want to outline the frequency of overnight guests as well. Short term vacation rental are a great resource to draw from that have these similar policies like:
- Quiet hours
- Hot tub or pool regulations
- Maximum occupancy, guests, and pets
- Parking areas
- Internet guidelines
- Trash collection
While utilizing this new way to rent might seem daunting, it’s a unique method that will attract a lot of college and millennial applicants. Because this is a new method for renting out your property, you will have to change your strategy as well. Screening tenants will be more important than ever as your tenants will be sharing living spaces. You will need to provide each tenant their own key and lock on their room’s door, and might have to be more involved with the property than before to manage the needs of multiple tenants. That being said, if you do successfully take on this new way of renting, you’ll be able to receive more gross rent then currently, incur less of a loss when vacant, and individual tenants will be responsible for their own lease. So why not consider it?
Do you know anyone using this new rental method? What do you think are the positives and negatives to renting to college students or working millennials like this? Let us know your opinion in the comments section below!