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Good Times for College-Town Landlords

But a dump won't do. "People have been way more demanding," Stoppe says. "Where they used to be happy with a kitchen that was done over in the '60s, now they want a dishwasher. People who are trying to get away with keeping the broken cupboards from the last tenants are not going to be able to rent their places."

Students are tougher on apartments than the average tenant, so prospective landlords need to take extra care to protect their property legally. That's why Stoppe's standard lease includes clauses such as this one: "No trespassing on any roof. Candle burning, fireworks or fires of any kind are prohibited on the property. Charcoal grills are not allowed. Gas grills must comply with fire codes. BB guns, paintball guns or weapons of any kind are not to be discharged or displayed on the property."

Students can be harder to vet for financial liability than professionals. While the latter are generally subject to credit checks, young students don't yet have credit to check. "We'll run a criminal background on the students and run the credit of the parents because they're the ones paying the bills," Orsak says. And to gauge relative domestic responsibility: "The schools will tell us whether they've been kicked out of the dorms or not," says Stoppe, who favors students "who don't reek of pot when they show up to look at an apartment."

Landlords who want the benefits of rent payments without the hassle of making sure students don't trash the property have the option of hiring a third party to play the heavy. Campus Advantage hires "community assistants," tenants who get free rent in exchange for acting as "24-hour eyes and ears," Orsak says.

Landlords who own only one or two rental properties may want to consider hiring a property manager to deal with rent collection and maintenance. Property-management fees often range from 10% to 15% of the rent, which can be well worth the peace of mind for an absentee landlord.

"If you manage the property yourself, you will more than earn that 13%," Stoppe says.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

Read More:   cost of living, gen y, renting
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