Renting rooms to college students/young professionals? (Socal)
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Randallstown, MD · Member since 2016 · 11 posts · 5 votes
9yHi Jeff!
I don't do this personally but I'm fresh out of college and got some knowledge from a friend's landlord. Also throwing in my feedback from going through apartment/house searching.
You definitely can charge more per person for renting a room vs the whole house, big pro. But cons are managing 3-4 people instead of one family or group. It's not bad when you have 4 responsible tenants but it gives four opportunities for something to go wrong instead of one. Late /no rent payments, roommates might clash and you/PM have to deal with complaints, more likely to damage because lack of a sense of ownership. You can get property managers who specialize in it and likely you'll pay the same percentage you would for a family.
My suggestion would be rent to a group of friends, professionals ideally but college students too. They look at it as they're paying for just themselves so you can probably get the same amount per person as if you were renting per room. I would even write it in the listing: "$500/mo per person" as opposed to "$2000/mo". You also get the some of the same benefits of a family; accountability with paying and mitigating potential damage being the biggest pro. Additionally less issues will come to you/PM because they're more likely to work it out themselves. Con being potential parties since they are familiar with each other which can lead to damage.
13 Replies
- 9yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
@Jeff L. I can guess what town you have your rental in with college tenants being a high possibility.
This very well could be an option; however, the price for the house should not be priced completely out of market range. Even as 3-4 students are looking to live somewhere they are still looking for a deal. The college student does not have as much money as the normal dual income family, and that is the big reason it will be a little harder to rent out.
There is always the possibility to rent it as an AirBnB; however, if the rental is in the same town you live I don’t know how high the demand is for AirBnB (something to look into though)!
The McKernan Group4.957 Reviews - Randallstown, MD · Member since 2016 · 11 posts · 5 votes9y
Hi Jeff!
I don't do this personally but I'm fresh out of college and got some knowledge from a friend's landlord. Also throwing in my feedback from going through apartment/house searching.
You definitely can charge more per person for renting a room vs the whole house, big pro. But cons are managing 3-4 people instead of one family or group. It's not bad when you have 4 responsible tenants but it gives four opportunities for something to go wrong instead of one. Late /no rent payments, roommates might clash and you/PM have to deal with complaints, more likely to damage because lack of a sense of ownership. You can get property managers who specialize in it and likely you'll pay the same percentage you would for a family.
My suggestion would be rent to a group of friends, professionals ideally but college students too. They look at it as they're paying for just themselves so you can probably get the same amount per person as if you were renting per room. I would even write it in the listing: "$500/mo per person" as opposed to "$2000/mo". You also get the some of the same benefits of a family; accountability with paying and mitigating potential damage being the biggest pro. Additionally less issues will come to you/PM because they're more likely to work it out themselves. Con being potential parties since they are familiar with each other which can lead to damage.
- Rental Property Investor · Dana Point, CA · Member since 2016 · 36 posts · 32 votes9y
I know a guy who's having some success with this in Orange. He has the parents cosign and said there is not a lot of risk of eviction or nonpayment. He did let me know that wear and tear on the homes is incrediblely high, so that needs to be factored in to your numbers. Obviously turnover is also higher.
Originally posted by @Joi Johnson:
Hi Jeff!
I don't do this personally but I'm fresh out of college and got some knowledge from a friend's landlord. Also throwing in my feedback from going through apartment/house searching.
You definitely can charge more per person for renting a room vs the whole house, big pro. But cons are managing 3-4 people instead of one family or group. It's not bad when you have 4 responsible tenants but it gives four opportunities for something to go wrong instead of one. Late /no rent payments, roommates might clash and you/PM have to deal with complaints, more likely to damage because lack of a sense of ownership. You can get property managers who specialize in it and likely you'll pay the same percentage you would for a family.
My suggestion would be rent to a group of friends, professionals ideally but college students too. They look at it as they're paying for just themselves so you can probably get the same amount per person as if you were renting per room. I would even write it in the listing: "$500/mo per person" as opposed to "$2000/mo". You also get the some of the same benefits of a family; accountability with paying and mitigating potential damage being the biggest pro. Additionally less issues will come to you/PM because they're more likely to work it out themselves. Con being potential parties since they are familiar with each other which can lead to damage.
Hi Joi,
Thanks for breaking down the pros and cons like this for me. Some invaluable insight there.
For your "rent to a group" strategy, are you thinking that they're under one lease or separate leases per individual?
Originally posted by @Joaquin K.:
I know a guy who's having some success with this in Orange. He has the parents cosign and said there is not a lot of risk of eviction or nonpayment. He did let me know that wear and tear on the homes is incrediblely high, so that needs to be factored in to your numbers. Obviously turnover is also higher.
Hi Joaquin,
Having parents cosign is a great idea, thank you. Do you happen to know if he self-manages or did he hire a property manager?
- San Antonio, TX · Member since 2017 · 6 posts · 0 votes9y
I have also thought about this strategy. I just graduated this last December, and from my experience the total amount collected for rent is way higher that way. For example, my friend is renting a room for $650, and so is 3 of her roommates. Nothing fancy but they each have their own bathroom. No yard, and the rooms are not even that big. She complains because her dog had no yard to play in. Not to mention, there is hardly any room for parking. So long story short, nothing too fancy. Total is $2600 collected for rent, not even counting what they pay in utilities. That same house in that area to a single family would rent for $1400 tops after looking at what other people are paying in that area.
Best of luck!
- Randallstown, MD · Member since 2016 · 11 posts · 5 votes9y
Definitely all on one lease, more accountability. And as @Joaquin K. stated, have each student have a parent cosign for them.
Also, definitely start your marketing for this as soon as possible. This obviously depends on the housing supply in your market, but people will start looking for next year's housing anywhere from 6-10 months in advance. I remember we moved in August and secured the lease the previous October and everyone I know had similar timelines.
Good luck to you!
Originally posted by @Keith Usry:
I have also thought about this strategy. I just graduated this last December, and from my experience the total amount collected for rent is way higher that way. For example, my friend is renting a room for $650, and so is 3 of her roommates. Nothing fancy but they each have their own bathroom. No yard, and the rooms are not even that big. She complains because her dog had no yard to play in. Not to mention, there is hardly any room for parking. So long story short, nothing too fancy. Total is $2600 collected for rent, not even counting what they pay in utilities. That same house in that area to a single family would rent for $1400 tops after looking at what other people are paying in that area.
Best of luck!
That's interesting... How do the utilities bills work in her arrangement?
I would've thought the owner would pay for it with this strategy but maybe there's a way to get the tenants to pay for it themselves?
- Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes9y
It's a revolving door,, If you choose to do this rent by the room, you will need to put a room number on each private room so if you ever have to file a eviction the room is designated,, I would suggest the electronic key pad type lock for main entry and one for each private room so easy to change codes. Set a designated parking spot for each room. and limit storage in any other area of the house.
roommate style housing is tricky, if your not also living there someone is more than likely going to have issues with someone else.
If you start with a group of 4 that know each other likely one of the group will move out, then they get another or open it up to a stranger.. it's a mess if they all are on the same lease.
I would rent by the month, by the room and set rent high enough to cover utilities.
Set house rules, no smoking inside, kitchen cabinet space designated per room.
I have a house 6 guys living there by the room. works out, they have a chore chart sheet like who takes trash down, who cleans bathroom week 1, weekly clean up of main areas on Sunday week 1 and they switch off weeks.. yup faces change but not to much of grief factor. they seem to realize that they all are saving some bucks with this arrangement.
- San Antonio, TX · Member since 2017 · 6 posts · 0 votes9y
Students here in San Marcos expect to pay for one room and utilities. I would estimate that 60% of the people there are students. It's probably the same where you are. It seems to be common practice and expected. I'm actually surprised I haven't heard about this more often. I would call a couple student living condos where you are and see what you would have to pay as a student (what is included or not i.e. utilities etc.).
Originally posted by @Keith Usry:
Students here in San Marcos expect to pay for one room and utilities. I would estimate that 60% of the people there are students. It's probably the same where you are. It seems to be common practice and expected. I'm actually surprised I haven't heard about this more often. I would call a couple student living condos where you are and see what you would have to pay as a student (what is included or not i.e. utilities etc.).
How would that work though? Do I divide the utility bill 4 ways and bill each student the following month separately from the rent?
- San Antonio, TX · Member since 2017 · 6 posts · 0 votes9y
For her, one person's name is on the utility bills, then every month they split it and pay the individual responsible for making the payment.
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