Landlording Basics

Today's Landlord Primer has to do with college students. When I say "college student" I am referring to someone in the 18 to 23 year old range who attends an institution of higher learning as their primary vocation. I am not referring to someone taking night school classes and working full time or someone (generally over 30) who has already had a career and a family and is going back to school.

I happen to think college students need a place to live just like anyone else. In fact, they have many options available to them that the average family doesn't have, including mom and dad and a dorm room. But, usually those aren't choices the student is looking for.

I understand everyone is different and there are probably wonderful people in this age bracket--some I would even consider renting to under the right circumstance. But the idea of six young people living under one roof with no other commitments does not bode well with me.

Let's say for a moment a college student wants to rent my home with three of his buddies. Between the four of them they can break up the rent to a small, manageable chunk each. This would give them left over money for the electricity, water, gas bills and beer. I am afraid they still wouldn't be renting from me. There are many landlords who don't mind students. I just don't happen to be one of them.

Students generally stay for a year or less. Despite their best of intentions, students really don't know what will be going on from one semester to the next. What if one of the residents on the lease wants to change schools? If that person bails, the other three are still responsible for the lease. And what if this person moves out and the enterprising roommates get another person to occupy that empty room. And, if the new tenant (who is not on the lease) doesn't work out and does considerable damage to the home, the other three are still liable for the damage.

That said, if a collage student only stays for a year, this puts the landlord in the predicament of having to revamp the property at the end of the lease and start the process over. Repairs, renovations and loss of rent are costly. I might have mentioned that a time or two.

As a whole, college students aren't domestic. When my brother was about 19 or so, he once roomed with three of his closest buddies. I went to visit once and found the trash piled high in the corner. My brother explained that it was Patrick's turn to take it out, so nobody else was touching it. Patrick had been out of town for two weeks.

College students don't generally have tools available to make minor repairs. So, if the door knob falls off, there is a greater probability of them letting the door knob stay off and just nudging the door open with their knee or foot. This action will eventually lead to a hole in the door. So, an $8.00 door knob repair becomes a $250 door replacement.

That said, once the door has been damaged, what is the motivation for them keeping the place up? They already know they aren't getting their deposit back. Why not play catch with a shot put and juggle the flame thrower in the living room?

What a student lacks in domestic, they probably make up for in social. As a landlord, it isn't comforting to hear from one of the neighbors because the tenants threw a wild party the night before. The police came. People were bungie jumping from the roof. There was underage drinking. And someone left their zebra on the front lawn.

College students usually haven't established credit. And, most likely they don't have a long-term job the landlord could garnish if necessary. To make up for this unfortunate situation, landlords find cosigners for the students. The cosigners tend to be the parents. A cosigner is the one who guarantees the rent and the condition of the property if their child doesn't hold up their end of the bargain.

On the occasions I have required a cosigner, I have insisted on having someone who lives in the state my properties are in. It is much harder to go after a cosigner if they are in North Dakota and my tenant is not. I also do my standard credit/background/eviction search on the cosigner. Additionally, I will ask for an employment verification.

As a real estate agent I have seen many properties near Arizona State that have suffered the "student rental" curse. These houses, though repaired, still have battle scars of students past. There are patched walls, low quality fixtures (faucets, towel bars, ceiling fans) that look like they were recently replaced and a bungie rope dangling from the balcony. The landlord is ready to rerent the homes, but the properties don't have an inviting feel.

The landlords I have met who do rent to students charge a premium. The deposits are higher. The rent is higher. I have the utmost respect to any landlord who is willing to go this route. I just don't have the stomach lining to handle it.