Living Off-Campus: Rental Options and Best Practices

When moving out of the dorms and into off-campus housing there are several options, each with advantages and drawbacks. The following suggests some precautions to take at the outset to keep yourself and your parents financially safer.

Living Off-Campus with Room-Mates - The Options

Whether your off-campus housing is an apartment or a house, one option is to rent a single room directly from the landlord. Alternatively, you can approach a landlord as a group of potential room-mates. In the latter case all the room-mates will likely be asked to sign a joint lease.

Finally, you could move into an off-campus place without a lease. You may sublet a room from one or more room-mates, either with or without the landlord's knowledge and agreement.

Renting a Single Room Off-Campus - Advantages and Drawbacks

When renting a room directly from the landlord you're only responsible for your own rent. If one or more of your room-mates leave, the landlord cannot come after you. If room-mates move out without replacement, your rent will not increase, but you'll have less noise and a greater share of joint areas (e.g. kitchen, laundry facilities, bathrooms, etc.).

On the other hand, if room-mates move out, you have no say in the landlord's decision on replacement room-mates. You may suddenly find a party-animal has moved in with you, making noise to all hours. Alternatively, the new room-mate may be a neat-freak who keeps bugging you.

To address this problem, you may offer your help in finding a replacement room-mate. Even if the landlord doesn't pay you for your help, you'll at least have some influence on who moves in with you.

If renting a room in the landlord's house, you'll probably find the terms extremely strict. However, any maintenance problems are likely to be addressed very quickly.

Renting a Home Off-Campus with Several Room-Mates - Advantages and Drawbacks

You may have banded together with some friends looking to rent an off-campus house as room-mates. Congratulations. Your group is likely to be more attractive for landlords of desirable properties.

Should one or more room-mates decide to leave, the remaining room-mates will probably know it before the landlord. You can go out and look for other friends you want to join you, and the landlord is likely to agree. Living with room-mates who are also friends is likely to make the whole "living off-campus" experience a much nicer one for all room-mates.

The landlord will most likely ask all room-mates to sign a joint lease, probably with parents as co-signers. This implies everyone is jointly responsible for the entire rent. If one or more room-mates leave early without a replacement room-mate coming in, the landlord can go after any or all of you for the lost rent.

If the departing room-mate moves out of state or overseas, the landlord may well come after the other room-mates and their co-signers. If you're the only room-mate from the same state, you may find yourself at the top of the list of targets through no fault of your own.

Two things can be done to reduce the financial risk for the room-mates and co-signers in this situation. First, set up a side-agreement between the co-signers, adding in the room-mates too. The agreement should require each room-mate and his/her co-signer to be responsible for his/her own rent. Should that room-mate default, s/he would need to compensate the others for any costs they incur as a result.

Second, the room-mates and co-signers can set up an escrow account where each puts in an extra month or two of rent. Should any room-mates default, their portions of the escrow account can be used to cover their rent until replacement room-mates are found.

Living Off-Campus without a Lease - Advantages and Drawbacks

The advantages of such an informal arrangement are most apparent when you leave. Without your signature on a lease, nobody has any hold on you. You cannot be forced to stay and/or continue paying the lease.

The drawbacks may show up more immediately. Leases protect renters too, not just landlords. If something breaks down, or if water is leaking into your room, you have little recourse should the landlord not take care of things in a timely manner. You may even come back home one day to find the locks have been changed and you're out on the street, possibly without your stuff.

Bottom Line on Financial Safety Living Off-Campus with Room-Mates

Living off-campus without a lease is a gamble that could easily end badly. This option is not recommended if you have other alternatives.

Signing an individual lease is safer financially than signing a joint lease. However, this does not necessarily make it the better option. Weigh the advantages and drawbacks before seeking out a "by-the-room" rental off-campus.

There is little likelihood your friends would willingly default on their lease and leave you holding the bag. However, especially when the economy is troubled, a parent could lose their job; the room-mate may be forced to drop out; etc. It is for such unfortunate circumstances that side-agreements and/or escrow accounts are intended. Done carefully, this may be your best option.