Renting a house to students: pros and cons #22
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Those who own an apartment in one of the big cities where universities are located, such as Milan, Turin or Rome, often find themselves wondering whether it is better to rent a house to students rather than to families. In this post, we try to help you by exposing all the pros and cons of this choice.
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Renting to Students: The Pros
The advantages of renting a house to students are mainly three:
But let's see these advantages one by one.
By renting a house to students, you can ask for a higher rent
In principle, the prices for renting an apartment to families do not go beyond a certain level: whether it is the average income in free fall for years or other factors, the fact is that an average family cannot afford to pay a rent beyond a certain level.
If you rent a house to students, you can choose to rent each room at prices that fluctuate around half the rent that a family can pay. So, your apartment pays double. Or even triple it if you have an apartment with many rooms.
In any case, territorial agreements are valid for this type of contract, which establish a minimum and maximum threshold of the rent. But the fact is that renting to students is a very profitable choice. If you then choose to stipulate a contract with a flat rate tax, the portion of income you receive from the rent is taxed at 10%.
Student leases have a shorter duration
The minimum duration of a student lease is only 6 months, while the maximum duration is 36 months. This means that:
In addition, college students move home much more often than other tenants, so if you can't build a trusting relationship with one of your tenants, or even if the tenant isn't paying on time, finding a new tenant doesn't pose any particular problems.
Students are tenants with a very low risk of arrears
This is obvious: the rent for an apartment or room rented to students is usually paid by the parents. Therefore, students present a very low risk of arrears. In fact, anyone who is unable to keep a student in another city simply does not engage in a lease agreement that they know they cannot pay.
Like everything, choosing to rent your apartment to students also involves risks. Below, we briefly illustrate the main risks you expose yourself to if you choose to rent a house to students
The Cons of Student Rentals
There are three main disadvantages of renting a house to students:
Student rentals require a larger time investment
If on the one hand the very fast turnover of tenants is a source of stable income, in the face of an almost immediate availability of the property, it is also true that responding to the messages you receive from people interested in the apartment, letting them visit the apartment, concluding and registering leases takes time.
Those who rent to families carry out all these operations at most once every three years. Those who rent to students, especially if they decide to rent single rooms every six months, may find themselves having to show the apartment to a dozen people, and to sign two, or even three leases.
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Investing in time is not a risk, but a cost. If you are a freelancer, or even an employee, to carry out all these operations you lose hours of work, or you will have to apply for a permit, and later recover the lost work day.
Student rents can decrease the value of your apartment
As a rule, the houses rented to students do not stand out for their furnishings: they are very basic apartments. For their part, the students do not pay particular attention to the maintenance of the house: if a tile breaks, if a shutter fails, if a door does not work well, a student will not bother to fix it.
He will simply leave the apartment after a few months to find a better one. Finding themselves visiting an apartment that is not in perfect condition, other students may ask for a lower rent, or even decide not to rent it.
And if, after renting to students, you think about renting it to a family because the family is more reliable, well, a family will hardly accept living in poorly maintained premises.
The result? This time you will have to invest time to make small repairs. In severe cases, renovations may even be necessary. Which means that the higher income from renting to students will cover the renovation costs.
What to say then, if one of the appliances in the apartment breaks down? Who is responsible for replacing the washing machine, oven, kitchen? If a family doesn't have too much trouble buying a new washing machine, the student's case is very different.
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Renting to students can annoy other apartment buildings
Fortunately, these are not very frequent cases. Most students are reliable tenants, who pay rent on time, and generally have a quiet lifestyle. But in the chaos of big cities and off-site students, there are also those who love to organize house parties that last all night.
What about the people who live in the same building, and who may have to wake up at six the next day to go to work? If at the beginning the condominiums will turn to students, if these uncomfortable situations persist sooner or later they will come to you, disputing your choice to rent to students.
In summary, choosing to rent your apartment to students is a choice that has various pros and cons. As in any case, the best solution - if possible - is to ask and verify the references of your tenant. Source: https://businessworld.com.pk/