The college rental market can be lucrative. Landlords that live in or near college towns know that opportunities abound to rent out their units. They also know that college students represent different risks than other adult tenants. Deciding if it is worth it takes a balancing test, where you consider all the factors and then decide how much weight to give each of them. Below are some points to keep in mind when contemplating renting your property to college students.

High Renting Demand

Landlords want money. They rent out their acquired properties to increase their wealth. There’s no better place to do this than in a college town. Every year, there are needy students who must find places to live.

This is a landlord’s dream: high demand. For some owners, high demand means higher rents. When this happens, many other landlords may follow suit. The ones that decide not to raise their rents still enjoy a regular stream of money.

Money from college students can be a secure source of income. In many instances, students get their money from employment, parents, student aid, or a combination of all of the above. These are all great and verifiable sources of income.

High Tenant Turnover

College towns are all about high turnover rates. Most students don’t stay in their college towns after they graduate. As a landlord in this market, expect new tenants on a regular basis and not just every four years. It’s fairly common for students to change residences yearly until they graduate.

This high turnover can work well for landlords. It can work out to be an easy way for the landlord to get rid of bad tenants. Most tenants, bad or good, leave when they graduate or before.

That being said, with high tenant turnover comes more work. Time, money, and energy are all required to advertise, process applications, schedule interviews, and clean when an apartment is vacated.

In addition, with higher turnover comes less of a feeling of ownership by the tenant. If a tenant knows they will be leaving a place soon, they tend to ignore the house or apartment and mistreat it. Some are even destructive.

When a tenant has a sense of ownership of a place, then they will do things to beautify the property and keep it maintained as if it were their own. This sense of ownership is difficult to achieve when there is a high turnover rate.

Zero Credit or Rental History

If you want to do business in this market, you’ll have to accept the fact that most of your tenants will have very little to no credit or rental history. The only property many of them have ever lived in is their parents’ home. This does not mean they will be awful tenants. It simply means you have to overlook their background if you want to find tenants in a college town.

The way to put your worries to rest about the lack of credit is through a cosigner. If a prospective tenant’s cosigner has adequate credit, then you are covered financially. If you are still concerned about the lack of rental history, you can ask for recommendation letters from the student. Anything that attests to his or her responsible nature should be good enough.

Inexperienced Decision Making

Youth can do nothing about their inexperience except letting them gain experience through mistakes. Student renters are inexperienced when it comes to taking care of a property. For older adults, basic property upkeep is intuitive and leads most of them to either handle problems themselves or call someone who can.

Some college students have this instinct already, due to the household education they grew up in. Their parents made sure they knew how to keep a property from falling apart. They know what to do or who to call when most common household problems occur.

As a landlord to college students, you will find that many of them have absolutely no knowledge of how to maintain a house or apartment or what to do if and when something goes wrong, such as a  broken water valve. If you have tenants like this, you can expect to be doing a lot of extra work when little to nothing goes wrong.

No Higher-End Finishes

College rental properties don’t have higher-end finishes anywhere and for good reason.

College students are generally kids trying to grow up. They still have that physical and social awkwardness that plagues all young adults. In other words, these college-age renters would probably damage higher-end furnishings.

This is a plus for you because it means lower cost furniture, appliances, and other household necessities. It also means less complaining. A student tenant is unlikely going to call his landlord because the bathtub isn’t up to par or there’s a chip in the kitchen counter.

Due to many of the considerations listed above, many landlords choose to raise the rent. For them, the higher price reflects the risky nature of this rental market. It is a tactic similar to giving a person a credit card at a higher interest rate because they have low or negative credit. Another way to hedge these risks is to increase the security deposit to a number that makes you comfortable.

Whether or not you decide to rent to college students will depend on how you feel about the challenges and perks their market brings. Whatever your decision, it is a viable market in many places and can be successfully navigated by a willing landlord.