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Are you thinking about renting out your investment property as student accommodation? With most graduate degrees lasting at least three to four years, renting to students can be a tidy flow of monthly income that continues indefinitely as long as the rent is of a fair amount and affordable to students.

But there are certain factors you need to consider before looking for tenants. Although student tenants are held to the same treatment as any other tenant (as per The Rental Housing Act), there are certain features in a residence that take precedence on a student renter’s needs and wants.

These include:

  • Adequate Wi-Fi access
  • Kitchen and laundry facilities
  • An entertainment and/or living area
  • Partial furnishing (not all residences)
  • Walking distance to campus
  • Easy access to public transport
  • Security

Our Guide to Renting to Students

House rules

To avoid future problems, it is advisable to come up with a set of reasonable house rules which outlines exactly what is expected of each student tenant. This should include house maintenance, noise control and damages.

The house rules can be attached to the lease and should be agreed upon with a signature from the student tenant.

Should the tenant do maintenance?

When renting to students, maintenance is usually determined as the outside of the property being the responsibility of landlord and the inside being the responsibility of the tenant. This however can be tricky with student tenants coming and going and is at the discretion of the landlord.

Ingoing inspection

This is a vital process that involves the landlord, the student tenant and if possible, their parents who will be the ‘official’ tenant while the student is the ‘occupier’. The inspection will look at the condition of the entire residence and living space occupied before the tenant has moved in.

This is recorded by the rental agent as proof of the inspection and attached to the lease agreement (with a copy for the tenant). The ingoing inspection report will be used as a reference for any maintenance or repair issues in the future.

Outgoing inspection

The same inspection is carried out when your tenant is moving out and should take place at a time and place that is suitable for both parties (as per the Rental Housing Act).

All damages should be discussed, noted and signed by the occupier at the time of the inspection.

Furnishing your student residence

It is also sometimes common practice, when renting to students, for a student residence to have partial furnishings such as a bed, mattress, chair, table, cupboard and kitchen and bathroom facilities. This is not a requirement but useful to attract tenants who require this when their primary residence is not in the same region or country as the university.

Furnishings will vary from rental to rental but it is essential that the initial state of the property be habitable with all basics in good working condition (as underlined in the Consumer Protection Act. Section 53-55).

What information should be in a written lease?

This is the most important document between you and a student tenant as it is the overall agreement which stipulates exactly what is provided, what is expected of the student tenant, rental payment days, etc.

Since the student residence will essentially be rented and paid for by the student’s parents, there should be signatory requirements and information needed for the parents and the student occupying the room.

According to the Rental Tribunal of The Western Cape, your rental lease should contain the following:

  • Your name
  • Your tenant’s name
  • Your postal address
  • Your tenant’s postal address
  • The address of the property being leased
  • The amount for which you will rent it out
  • The amount by which the rent will increase (usually 10% per year)
  • When the rent will increase (i.e. If house rates increase)
  • How often rent is to be paid (i.e. monthly)
  • The amount of the deposit and how and when it is returned to the tenant
  • Your and your tenant’s agreed obligations (for example, who is responsible for maintenance? Who will pay the water, electricity and rates bills? Usually, the tenant pays for charges related to consumption, such as water and electricity, and the landlord pays for charges related to the property, such as rates.)
  • The conditions under which either you or your tenant can give notice to cancel the contract
  • The House Rules, signed by both parties, should be attached to the lease.
  • A list of defects drawn up during an ingoing inspection when the tenant moves in. This should be signed by both you and your tenant and attached to the lease.

Do I need to ask for a deposit?

Absolutely. A deposit is set in an interest bearing account for the duration of the lease and is returned with all interest accrued when the tenant moves out.

Should there be any damages, abnormal wear and tear, breakages or non-payment, funds will be taken from the deposit and returned to the tenant after all proved deductions have been made. Think of your deposit as your financial ‘safety blanket’ for any possible future issues that may be occur.

Never underestimate the power of a stable and fair student residence

Renting out your property to students can be a fruitful and continuous venture. Students are always looking for accommodation that will make both their studying and living requirements comfortable, enjoyable and most important of all, stable.

Should a student graduate and move out, they will often do most of the advertising of the space themselves. This is done either by word of mouth, on campus or on social media. This makes the continuous rental of your property a great possibility and what’s more, it will come with great referrals from previous tenants.