How can a property Manager lower any risks!
Many rental property owners may face a dilemma of whether they should rent out their property to students?
According to National Statistics Office NR 157/2016, the highest bracket of inbound tourists to Malta fall within the age group bracket of 25-44. Most of them are youngsters coming to Malta to party, for a bachelorette or a bachelors party.
22% of all inbound tourists in Malta for the period Jan-Aug 2016 fall within the age group bracket of 0-24 which is quite a big number covering the students coming in to Malta to learn English and also ‘enjoy’ their stay.
We came across this interesting relevant article which we would like to share with you together with local stats.
Most college students have never owned their own home and as a result, there is a greater chance that they may lack the respect that is typical in a fellow homeowner. A fellow homeowner is more inclined to realise that this isn’t a hotel room. It’s someone’s home and as such, it deserves to be treated with respect and care.
As the owner of a vacation rental, there’s a good chance you’ll be contacted by college students who are seeking to rent your vacation home for a Spring Break vacation or post-graduation celebration trip. In fact, college students account for tens of thousands of travellers every year. According to a survey by CheapTickets, more than half of all college students planned a Spring Break trip in 2015, with most traveling to a warm destination and Malta is a warm destination with a lot of options to party and doing a number of summer activities.
But college students aren’t always the best guests — many have one primary goal: to party as much as possible, which can spell trouble for your rental property.
So as a property owner, you’ll need to make an important decision: Should you rent your vacation home to college students? And if you do decide to rent to this demographic, can a property manager help to mitigate some of the risks involved?
Why Do College Students Represent a Greater Risk or Liability for my Rental Home?
There are several reasons why college students are more likely to pose a greater risk to you as a property owner.
There’s also an element of increased risk associated with the partying that’s typical of college students, particularly those who are on Spring Break. Drinking and partying can increase the chances of property damage, an injury on the property, or thefts. It’s not entirely uncommon for a group of college students to meet new friends on a Spring Break trip, so even if your guests are respectful of your vacation home, there’s no guarantee that the new friends they invite over will be respectful too.
Parties can also result in neighbourhood disturbances, causing real problems if some of the neighbours are full-time residents. The situation can be especially tricky if your vacation home is located in a condominium complex, gated community, or another community with a homeowner’s association. These communities may implement strict rules and regulations that your guests could violate, resulting in fines, penalties, and other stressors for you as the property owner.
There’s also the matter of financials. Generally, multiple college students pool their money together to pay the rental fee. But if one student opts out of the trip, the group may be unable to afford it. Therefore, it stands to reason that there is a higher risk of cancellation since you are relying on multiple people to follow through to cover the fee. This is another key point to consider, particularly when it comes to your deposit and refund policies.
Considerations When Deciding to Rent a Vacation Home to College Students
When you’re making the decision to rent your vacation home to students, consider the ways in which you can mitigate some of the risks by working with an experienced property manager.
Consider adjusting your rental fee and damages deposit. If you’re planning on renting to college students, you may want to speak with your property manager to determine a suitable damages deposit for this particular demographic. Typically, there is a uniform damages deposit fee that is charged across the board for all guests, so by adjusting the deposit so that it’s appropriate for the highest-risk guests, you’ll increase your chances of covering any and all damages that actually occur. It’s also not uncommon to charge a premium for certain rental timeframes, such as Spring Break and public school vacation weeks, so this can help offset the risk somewhat, too. Your property manager can recommend premium rates for specific timeframes.
Is your property manager able to check on the property periodically? You may enjoy greater peace of mind knowing that your property manager is in the area and available to peek in to ensure that your vacation home is not the site of a wild week-long party. Another option is to install surveillance cameras inside and outside of your vacation home, allowing you to monitor the home remotely. This is typically legal, providing you post notices and inform the guests that the premises are under surveillance and avoid placing cameras in areas such as the bathroom or bedroom.
Recording the footage also provides you with valuable evidence for an insurance claim or even in the case of a civil suit. Curiously, numerous studies have revealed that we tend to behave in a more civilised manner when we believe that we’re being watched. So the mere presence of surveillance cameras can go a long way toward changing your guests’ behaviours for the better.
Do you have a way to effectively evaluate the home before and after each guest? This is especially important if you opt to rent to college students because there is a higher potential for damage or theft. If you’re charging a damage or theft deposit, then you’ll need to perform an inspection of the home before and after each guest stays in the property so you can determine if you will return the damage deposit. That’s a major advantage of working with a local property management firm. Local property managers can stop in to your home regularly to inspect for damage, and will be able to acquire a fair degree of familiarity with the home to spot anything that’s missing. It’s also wise to perform a video walkthrough (this is also good for insurance purposes), so you can opt to personally review the video too if you wish.
Consider adjusting your contract. Rental property owners may also consider reviewing their rental contract and adjusting the wording that will minimise or even release you from liability in the event that an injury occurs on the property. You may also adjust the contract so that it makes it easier for you to recoup compensation for any damages that exceed the damages deposit. The wording on these contracts can get technical, so it’s advisable to have your property manager consult with you and handle contract changes to ensure everything is worded properly.
Can you vet guests and check references? This can be time-consuming if you’re trying to do it yourself, but many property management firms also offer vetting and reference checks for guests, offering some additional peace of mind.
Property Managers Help Make Renting to College Students a Smoother Process
If you’re renting your rental property to college students, there is a higher risk of complications than if you were to rent to a retired couple or a young family of four. It’s vital that you, as the property owner, fully understand the risks as you decide whether you’ll rent your property to this demographic. If you do decide the risk is worth the reward, then you can work with your property manager to ensure that everything runs smoothly.
If you are in search of a property manager who can take care of all these nitty gritties giving you the best return on your investment while keeping your property up to date, call us Casa Rooms on +356 9983 7454 or email us on: firstname.lastname@example.org
Our commitment is to give you the best return on your investment.