Renting: Students (What-to-know)

  • Navigate the complexities of renting to students with our guide. Discover rental pricing trends near universities and strategies for a successful landlord-tenant relationship

Renting properties to students is a prominent segment within the housing rental market, offering consistent returns for landlords, particularly when properties are situated in close proximity to colleges and higher education institutions.

One advantageous aspect of renting to students is that minimal furnishings are required, as fancy decor isn’t necessary, keeping rental costs lower. Student tenants generally don’t demand the latest appliances or upscale decorations compared to working adults or more mature renters. This leads to cost savings for property owners in terms of furniture, fittings, and fixtures.

Owning property near educational institutions offers landlords the advantage of advertising through student organizations, which can save money compared to paid advertising or using property agents to secure student tenants.

During a previous property boom, student rentals in the Klang Valley could generate ROI of 7% to 8%. However, in the current slowed housing market, the ROI typically ranges from 5% to 6%. A mature township like Setapak in Kuala Lumpur, which houses a Tunku Abdul Rahman University College campus, has amenities that make tenancy easier to secure.

Larger units are preferred by students in Setapak when it comes to non-landed homes, as they can share the costs with housemates. However, they also prefer landed homes due to the potential for accommodating more tenants, though the supply of such homes in the area is limited.

Students in Setapak prioritize low rents and practicality over elaborate facilities, being willing to share spaces with friends or coursemates to save on travel costs and allocate their budget elsewhere.

In areas like Bandar Sunway, near Sunway University, Taylor’s University, and INTI College, monthly rents for student accommodation can range from RM450 to RM780 per person for shared rooms and RM1,150 to RM1,650 for single rooms. Demand often outpaces supply in these areas.

However, renting to students comes with challenges. Late payment of rent, unexpected tenant departures, and unauthorized property modifications are common issues. Young students may lack the experience and responsibility of more mature tenants, leading to inconsistent payment of rent and bills.

Subletting can also be a concern, leading to overcrowding and misuse of the property.

To minimize risks, landlords can tailor leasing terms to include clauses about noise, occupancy limits, and property maintenance responsibilities. Including parents as co-signers to the Tenancy Agreement can add a layer of responsibility. Regular property inspections and setting clear expectations for appliance maintenance can help create a more organized rental arrangement.

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