My question is, is this following situation legal? I'm not trying to get my current landlord in trouble. If this is legal it seems as if he's making pretty great returns. The property I'm renting a room in he bought for 60k and put 15k into remodel. He also segregated all of the common areas into rooms ie. Dinning room, living room. It is now a 6 room 2 bathroom. The bathrooms and kitchen are the only shared areas. The rents range 400-500 per month depending on size. I am I'm the 400 dollar one. All utilities and WiFi is included. So let's just say avg rent of 450 each unit per month is 2700. 4 of the units have been occupied for over a year each and mine I have no plan on moving anytime soon. When the final room becomes available he rents it out within a day. this is not in a very safe part of my town but people are choosing this type of rental because it's cheap. he also told me he's currently converting an area in the back of the house into 2 more rooms so he will have an additional 900 per month in about 2 months. this situation financially just seems too good to be true. what am I missing or maybe I'm not missing anything and it may be 100% illegal. 60k mortgage not including down pmt, 15k remodel monthly rental income of 2700 and soon to be 3600. utilities can't to huge because I work nightshift everyone else is Dayshift so during daytime hours there are practically no utilities being used. sorry for the long post if you have made it this far.