Underwriting a PadSplit deal - assumptions and operating expenses

[Elizabeth Rose]

Hi friends! I'm exploring getting into PadSplits. I've read a lot of posts in the forum here on the pros and cons of this strategy... what I would love is some insights from actual PadSplit hosts on the assumptions/operating expenses to take into account when evaluating a property.

**I understand this data will vary market to market, I'm just looking for ballparks here.**

I'm wondering specifically about:

- Cost to furnish - do you work with an assumption based on the number of bedrooms? For example: $700 per bedroom x 8 bedrooms = $5,600? (just looking for a ballpark here)

- Average number of room turnovers per year - PadSplit says the average tenant stays 9 months

- Average cost of each room turnover (room & carpet cleaning, repairs due to wear and tear)

- Repairs and maintenance - how much are you typically setting aside for this? I imagine it's higher than a typical single family rental considering it looks like the host usually ends up paying for any damage caused by tenants due to a variety of reasons (tenant refuses to pay, damage happened in a common area and it's not clear what tenant caused it, etc.).

- Rental loss - PadSplit claims they collect 97% of rents, but I've spoken to a few hosts who have said that a much larger % of their tenants get kicked out owing $500 or more in back rent that is rarely ever collected - what's your experience been here?

- Evictions - do you budget this cost into your underwriting? If so, how much?

- Do you send in a cleaner to clean the common areas? If so, how frequently?

Thanks in advance for your feedback!

[Josh Bowser]

Missed evictions - tbh I'd just underwrite a little bit higher vacancy than what people are telling you if you're concerned about it. OR Talk with a property management team that specializes in Padsplit / Co-living and they can give you some more realistic numbers to go with when it comes to occurancy % and cost!