Littleton · Member since 2018 · 43 posts · 14 votes
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!
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.
Gillette, WY · Member since 2018 · 44 posts · 19 votes
7y
@Jonathan Marsh
I'm not sure if this applies to your situation completely, but there is a podcast where they talk about student housing. One lease that all sign and parents must cosign. Sounds like a win. I'm not sure what episode exactly but search in YouTube. It's a good one.
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.
Rental Property Investor · San Francisco, CA · Member since 2017 · 207 posts · 138 votes
7y
I would love to listen to this podcast. Anyone know the episode number? I am setting up a air bnb. And was tempering with the idea of renting it out by the room as i feel like the entire house would lead to many parties.
Littleton · Member since 2018 · 43 posts · 14 votes
7y
@James Carlson-Thanks for the insight. I am particularly intrigued by the liability aspect as well. I think that is possibly the most important thing to figure out. I thought about the extra work as well, but would certainly be willing to take on the additional work for the extra money. Intra-house issues are a concern, definitely. I would prefer to not be involved in those :)
If you don't mind me asking, how does your travel nurse model work? That's an interesting idea.
I'm trying to locate that Podcast. Sounds like it has a lot of valuable feedback.
There's not much more to the travel nursing model than what it sounds like. We furnish small spaces -- the smaller the better, in my opinion -- and market as a 3-6 month rental, perfect for traveling nurses, students, interns, business travelers, etc. "Traveling nurse" is just a catch-all for anyone looking to rent for a medium term.
I have clients here in Denver who I helped buy for the same model, and they have used a Facebook page that targets traveling nurses to get the word out. We may have to do that at some point, but so far, we've had success with Craigslist and Airbnb (with the listing set to a 90-day minimum rental period).
It's done well. For instance, we have a 350sf studio that we could probably get $1,000-$1,100 for as a long-term rental. For the past two years, we've got between $1,650 and $1,795 for it.
In my last years of college, some friends and I lived in rental houses right outside of campus. Each of us cosigned the lease with our respective parent as to guarantee payment to the landlord, and we rented by the room. If a single tenant didn't pay their monthly rent, the rest of the tenants would have to split the cost among them or the landlord would expect the parent to pay the rent. In terms of damage, the landlord would keep the safety deposit of the guilty tenant and if no one admitted fault, he would keep all safety deposits. We didn't have any such issues, but those are some safeguards the landlord put into place.
Our last house was 7 bedroom, and I guarantee that the landlord was making significantly more cash flow through renting by the room than by renting the whole house out. Not sure the vicinity of your SFR's to any colleges, but it's worth looking into for sure. It is easy to raise the rent if your tenants cycle every year or two. Additionally, renting out to a unit of friends (college students or not) may be easier to manage than random tenants.