STRATEGY for cash flow: Renting by the room vs Rent the whole house??

[Carissa Atendido]

I'm a rookie investor and was initially set on buying my first rental property using the LTR strategy—renting out the entire house.

Recently, I reconnected with a friend who’s been investing in real estate for a few years. She owns properties in both the LA area and Atlanta and uses a “rent-by-the-room” model instead. She’s earning nearly twice as much compared to renting the whole house traditionally. She finds tenants through platforms like PadSplit, and typically furnishes the entire property to qualify.

While the increased cash flow is definitely appealing, the idea of managing a rent-by-the-room setup feels a bit intimidating as a first-time investor. I had been focused on finding LTR opportunities in Central Florida, but now I’m also exploring larger markets like Austin and Atlanta where this model seems to work well.

Has anyone here tried the rent-by-the-room strategy? I’d love to hear your experiences—any advice, affirmations, or cautionary tales are welcome! Or do you think it's better to stick with a traditional rental for my first property?

Thanks so much,
Carissa

[Denise Supplee]

Hello @Carissa Atendido,

I have rented by the room and an entire property. Although more money can be made renting by the room (depending on location), there are other considerations. First, the aggravation factor increases because you are now dealing with more renters. For instance, more coordination, maintenance requests, and potential conflicts. Conflicts are tougher when there are shared spaces. Make sure you also check the location for zoning rules. Some towns even restrict room rentals and/or short term rentals. Some impose all kinds of fees. Overall, it can be more lucrative than a SFH or rental. But be sure to conduct your due diligence and be very realistic about the extra time that could be needed. Best of luck!