Rent by Room versus Rent by Whole House

[Jonathan Marsh]

I have some single family homes in Aurora (just outside of Denver). Currently, they are all single family homes rented for around $2,100-$2,300. I have one lease coming up and was considering renting by the room. I figured on a 4 bedroom, I could probably get around $800-$900 a month per room and effectively $3,200-$3,600 total per month. From a monetary aspect, the upside of doing this is obvious. I was wondering what some thoughts are from those that have utilized this strategy. What are the pros and cons and how do you manage having 4 potential strangers living under one roof? Thanks in advance!

[James Carlson]

@Jonathan Marsh

Awesome idea. If you could get an extra $1,000/month, then I say go for it. The questions I have are about viability and liability.

First question is whether you could consistently get those rents. It seems like kind of a pain to have this rotating cast of roommates. What happens when they have an intra-house issue? Do you have to get involved? 

That said, my wife, @Erin Spradlin, heard the same arguments about our furnished travel nurse model that we've used on two condos here in Denver's Capitol Hill neighborhood. People asked whether we had a lot of vacancy and whether it was too much work compared to a long-term tenant. The answers were "no" and "no," especially when you consider we are getting about 150% of what we would get as an unfurnished long-term rental. So ... in a way, that tells me you should try it.

As for the liability ... As @Daric Myers said, how do you deal with who's liable? For damage? For rent? I think that podcast he's talking about has a lot of good ideas. 

I wish you luck!