For most college students, there comes a day when it’s time to leave the dorms.
At the University of Minnesota – Twin Cities, I hope all of the good tenants choose to rent from me! However, the reality is that I have some fierce competition and I work hard to attract (and keep) the tenants that I do have.
To stay competitive, I frequently ask myself the following questions:
- What do they want or need?
- Where do they want to live?
- What is their budget?
- What am I competing against?
Student Needs vs. Wants
My husband will tell you clearly that I have Krug Brut Vintage 1988 Champagne tastes on a Pabst Blue Ribbon budget. So like many students with their housing wish lists, I compromise by drinking Sofia Blanc Minis (champagne in a can).
On average, almost all students need the following:
- Convenience to campus
- Internet access
- Room sizes to accommodate all of their personal belongings
- Storage space for bikes & equipment
- Secure entrances & exits
However, they want plenty of other amenities:
- Multiple bathrooms
- Ginormous closets
- Central air
- Free, on-site laundry
- Stainless steel appliances
- Chauffeur & valet service
- Personal chef
Ok, I was just joking about those last two, but you get the point.
In reality, the needs and wants of tenants have not changed much over the past 10 years. What has changed is that more landlords are willing to offer the extra amenities in order to attract new tenants.
Lucky for me that most of my competitors still have ugly and hard-to-navigate websites, if they have a website at all!
It is no surprise that if I offer two houses that are exactly the same but one has stainless steel appliances, central air and a dishwasher, I will rent out the one with the better amenities more quickly and at a higher rate.
Slow and Steady Wins the Race
Angie, why do you still have houses without these extra amenities?
Great question! The answer is always “money.” As soon as I have the extra money to invest back in these properties, I will. Just as students have a budget, so do I!
A Budget in the Life of a College Student
If their budget today is anything like mine was in college 10+ years ago, their top priorities consist of the following:
- Bar Tabs/Liquor Store Runs
- Clothes & Shoes
- Spring Break
- Cash For Late Night Taxis & Bad Food Decisions (Whoa…why didn’t I stay in college longer?!)
While I am fairly certain that my tenants are not hosting parties featuring Snoop Dogg, like Will Ferrell did in the movie Old School, I am positive that most of them are having a pretty good time.
Since I am well aware of what students really spend their money on, I usually base my pricing on the previous year’s rental success in combination with evaluating what my competition is charging.
NOTE: I like to make sure that my incoming student tenants have either full parental support, a savings account full of dough, and/or student loans and scholarships. I screen them like any other adult applicant.
Like many campus towns around the country, the Twin Cities have seen a boom in new apartment construction geared toward students. However, there has been little development in the single-family house and duplex market.
Though the new apartments will surely siphon away some of my potential applicants, students will always gravitate toward larger group houses because they’re the most effective way to reduce a student’s proportional monthly rent. I still keep a close eye on any other single-family and duplex rentals to ensure I stay competitive.
I like to monitor my competition’s pricing, product and supply on a monthly basis.
If I find that my inventory remains available for a significant period of time longer than my competition, I know it is time to drop the price, offer a deal, or upgrade my amenities.