If I accept college students as renters, what are some of the risk management practices to help protect my property?
There are some common risk management practices that can help protect your business. You may you need to add or modify rental practices to better support your individual business. Many students are first-time renters and have little to no experience in an independent living arrangement. As the landlord you may need to be more actively involved in daily operations in order to stay on top of things. It’s important to be accessible to your tenants for their questions, maintenance and repair requests, and community living issues.
Communication between you and new tenant is an important part of a good tenancy. Start off by letting your new tenants know the best way to communicate with you – such as a rental portal or directly with you by phone, text, or email – and what policies and practices are in place to handle their questions, concerns, and emergencies. It’s a good idea for you to define for new tenants what constitutes an emergency, what the tenant should do in case of emergency, and what you will do in response to an emergency.
You should not take for granted that a new tenant understands rental living. New renters may have more questions than an experienced renter. You may need patience in the beginning of the tenancy to train the tenant on your rental rules, particularly rent issues, that is when the rent is due, how the rent should be paid, if there is a grace period and/or a late fee if rent is not paid by the due date, and what happens if the tenant defaults on his lease terms.
A landlord-tenant relationship is a business relationship and while you can be friendly with a new tenant, you must be professional in all your dealings and respectful of tenant rights.
You need a strong lease agreement that has clear, well-defined rental terms and conditions. During new tenant orientation the important lease clauses should be reviewed with all occupants and with co-signers or guarantors as applicable. The new tenant(s) should be reminded that the lease agreement is a legal, binding contract that governs landlord and tenant obligations and duties for the stated term of the lease. This is an important reminder to a student tenant that he is obligated for the full payment of rent for the stated lease term and the consequences of a lease default. Lease clauses for joint and several responsibility and prohibition of noise and disturbances should be strongly emphasized. All deposits and fees should be collected in good funds before the rental unit is transferred to the new tenant. Remind the tenant that the security deposit is not rent and cannot be used for the last month’s rent.
A move-in inspection of the rental unit is strongly advised and in many states is required by statute. Your lease terms and conditions should require the tenant to sign and date the move-in checklist regarding the condition of the unit at move-in date. The tenant should be advised that the same checklist will be used at time of move-out to determine if the rental unit was returned in the same good condition. It can be helpful to provide the tenant with a copy of important need-to-know rental practices such as trash and garbage collection and disposal, parking rules, laundry facilities, or other information that was covered during orientation to help the tenant get settled.
A strong lease agreement should be strongly enforced. The new renter must meet lease terms and conditions, community rules, and must know what happens when he violates his lease including legal action for material violations of lease terms. The lease agreement terms and conditions and the landlord’s rental rules help protect the tenants, the neighbors, and the property. If rules are not enforced or lease defaults are allowed to go without notice and correction, the safety and security of other tenants could be at risk.
Renter insurance coverage is another way to protect both you and your new renter. As allowed by the state’s landlord-tenant laws, you should require the renter to purchase renters insurance as a condition of tenancy. You should remind the renter that landlord insurance coverage does not protect a tenant against liability claims related to a rental or cover the tenant’s personal possessions. It is the tenant’s responsibility to protect his possessions against loss or destruction and to defend against claims of personal liability for injury to other persons or property damage.
Document everything related to the tenant and property that is relevant to the tenancy. This would include the rental application, screening reports, applicant interview notes, lease agreement, supplemental documents, tenant orientation details move-in/move-out inspections and checklists, maintenance and repair requests and completed work services.
It can be helpful to contact the new tenant after tenant is settled in but before the first rent is due to answer any questions or provide assistance or instructions as needed.