The Benefits Of Student Investment Properties
Many investors balk at the idea of student investment properties. This always surprises us as we’ve owned both types, and the overall experience with students has been much better than with regular residential rentals. We’ve outlined some reasons below:
Reason 1
Parents typically co-sign the leases. The students don’t pay, their parent does, so the probability of having issues with rent cheques bouncing is much less, especially for the demographic of university bound children’s parents. When a residential tenant bounces his/her rent cheque, the landlord is stuck paying their mortgage that month out of their own pocket. With students, it’s rare that all students in a unit would bounce, so even if there is one bounce, the other students end up covering much, if not all, of the mortgage.
Reason 2
Since the parents co-sign the lease, if their son/daughter damages something the parent pays.
Reason 3
Students are typically not as knowledgeable regarding rental legislation as “professional tenants.” A bad student is gone in a year. A bad tenant can hang on and cause misery for years.
Reason 4
Students typically do not have pets, smoke, or have small children.
Reason 5
Vacancy can be better managed. A regular residential tenant can pick up after 60 days notice anytime at end of lease. Students leave either at the end of April or the end of August. Replacement students will rent starting May or September.
Reason 6
Students typically pay a premium over a family for unit rental for the same square footage.
Reason 7
Students typically go home for the Summer. Our properties are usually fully rented year round – but half occupied over the summer. That’s hard to beat!
Reason 8
The workload for an owner of a student investment property revolves around “marketing” and “outgoing/incoming” activities. Marketing is done January to February – typically. Outgoing/incoming occurs either at the end of April or the end of August. It’s usually not a year round management endeavor – so it’s very predictable.
Reason 9
Students are there for an education. They are not there to mess with their landlord – they simply don’t have the time if they’re serious about their education.
Reason 10
With “zero-down” residential purchase options available, super first-time home buyer incentives, and low interest rates, it makes us wonder who is coming to your door to rent – and why – if they are not a student? As such, in our opinion, the quality of the residential tenant has greatly deteriorated in the last five years and the students have stayed the same.
Try student investment properties out. We think you will be pleasantly surprised.
by Eric Klimstra
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photo credit: Universidad de Navarra
