International renters are an under-served market in the rental game. Despite a regular influx of international students and professionals coming to the U.S. for school or jobs, many landlords are unsure of the best way to go about screening these potential renters, and this extra hurdle puts some property managers off a market that could help lower their vacancy rates and boost the NOI on their properties. But tapping into the international renter market is probably more accessible than you think – and the benefits of doing so far outweigh the challenges.
Why are international renters good for your business?
As potential residents, international students or long-term visitors come with a variety of benefits that are hard to beat:
Thriving, high-demand market
According to recent studies, the supply of housing for international students isn’t rising nearly as fast as the demand. During the 2021/2022 school year, there were 948,519 international students in the U.S. That doesn’t include the number of professionals coming to the United States to join tech, medical, or other high-end jobs. High demand and limited supply means more competition for the units that are available to international renters, offering the owners of those units the potential for higher profit margins, and more potential renters.
Lower likelihood of default
Another benefit of international renters is that they are usually less likely to default on rent payments. Mostly, this comes down to money security: Many international students come from well-off families, who can afford the cost of sending their child to school in another country. Since the laws regarding working as an international student are strict, it’s also more common for families to plan ahead and set aside enough to cover the entire cost of each year of school and housing. In fact, students who come to the U.S. on a J-1 visa must prove to the U.S. Consulate that they have funding for their entire course of study (for an F-1 visa, students must prove they can cover the entire first year).
Longer-term leases
International students are in school for multiple semesters or years, and once they have found a secure housing option, they’ll likely want to stay there. International professionals who come to the U.S. for a job are often looking for longer-term rentals as well - especially if their family is relocating with them.
Preference for higher-end or fully furnished rentals
International renters are looking for a safe, streamlined renting experience, and many will prefer fully furnished apartments so they don’t have to hassle with furniture purchases when they arrive for school or work. A surprising number of international renters also prefer luxury apartments, likely due to the added security and convenience. This gives you an opportunity to have secure, income-verified tenants in your luxury properties, or add furniture rental to your monthly rental income.
“By-the-room” rental options
If you have a house for rent, and you’re willing to deal with a bit of extra leasing paperwork in exchange for a higher NOI, you can often rent by-the-room to international students or professionals who are seeking a more community-building experience. Renting by the room benefits your international renters who still want to feel like part of a community, and gives you the opportunity to make a higher rental income from the property than you would if you rented it as a single unit.
What documentation should you require for international renters?
Working with international renters starts with knowing what documents to ask for when you conduct your renter screening process. It’s a good idea to start with the following:
photo ID (passport, international driver’s license, or other legal identity document with their photo)
school/work visa (many visas actually require that the applicant prove sufficient funds before the visa is granted; for reference, here is a shortlist of visa types that allow work)
1-20 form (only applicable if they are a student; proves their eligibility to study in the United States)
ITIN or social security number (not every international renter will have one of these, and that doesn’t have to be a dealbreaker - many won’t have credit established yet in the U.S.)
bank statements (minimum 2 months; recommended 6-12 months)
letter from school or employer (an official letter functions as proof of enrollment or employment)
proof of financial assistance (documentation that proves a scholarship, a loan, or an offer from someone financially capable to guarantee their lease)
recommendation letters (from previous employers, landlords, etc. who will vouch for the applicant’s character and reliability)
A potential international renter who can provide all of the above is actually probably a step ahead of most local renters in terms of your ability to thoroughly assess their eligibility.
What’s the best way to screen international renters?
Before you can take advantage of the benefits provided by international renters, you’ll want to make sure you understand the similarities and differences in the screening process, and that you’re set up to screen international applicants smoothly. Knowing the best practices for screening and having a good system in place will help you tap into this under-served market efficiently:
Background checks
Many landlords express concern about the difficulty of background checking international renters, but it is actually very difficult to obtain a United States visa with a criminal record, which is one reason that many universities who hire international students to work on campus do not require a criminal background check unless the student has been present in the U.S. for more than one year. If you have additional concerns, there are a number of companies who will work with you to qualify - and insure - international renters.
Financials
The recommended bank statement documentation above, in combination with any proof of financial assistance and letters of employment or recommendation will go a long way toward replacing the credit report you would typically run on a local renter. It’s also good practice to require lease guarantees for your properties, which ensure that you still receive your rental income, even if a renter defaults on their lease.
References
Don’t be afraid to check international applicants’ references the same way you would check local references. Even if there is a difference in time zones or a language barrier, new technology has made it significantly easier to work - and check references - worldwide. There’s even a translation app for Zoom meetings.
Screening international renters is not significantly more complex than screening local renters, once you have a good process in place, and taking the time to put that process in place will benefit your NOI in the long run.
Boosting your NOI by tapping into the international renter market
Managing rental properties is all about mitigating your risk and maximizing your upside. When marketing and renting to international renters, you’ll want to consider:
Streamlined rent collection process
Consider implementing a system that allows renters to set up automatic payments for rent. This increases the likelihood of your residents paying on time each month, and makes things less complicated for international renters, who may be paying their rent from an account or card set aside specifically for that purpose.
Rent coverage insurance
You should already require renters’ insurance for all of your properties, but rent coverage insurance products are very different from renters insurance. Rent coverage insurance is purchased by the renter, with the landlord as the beneficiary, and it acts as a lease guarantee that ensures that the landlord will get paid - either by the renter or by the policy. TheGuarantors is well versed in dealing with international renters, and boasts that its staff is available 7 days a week in any one of six languages.
Where to find international renters
Renting to international students and professionals is a win-win for both the landlord and the renter. If you’re looking to market to international renters, you might start with:
Local universities
Universities and colleges are likely to be able to refer international students and researchers to apply for your units. In fact, these organizations typically get quite a few requests from incoming international students to connect them with housing - and student housing on most campuses fills up quickly!
You could also work with a company that specializes in securing renters who are typically overlooked by the market. TheGuarantors provides a wide variety of products designed to make it easier to rent to applicants with “nonstandard” income streams - such as freelancers and international renters - without increasing your risk - and part of their service offering is to help find and qualify more renters for your properties.
International renters can make wonderful residents, giving you a sense of security for the safety of your property and your payments. With proper preparation, collecting the right documentation, implementing some simple international screening and rent collection processes, and finding the right connections to market to international renters, you can enjoy the benefits of this high-demand, low supply market and qualify more amazing residents for your properties.