I am super interested in buying homes to rent-per-room (individual leases) in Tacoma, WA. As many know, the Seattle region has a housing shortage, and I think this type of housing would be desirable for people who have steady jobs and good credit but can't afford to pay $1500/month for a 1 bedroom. From what I can calculate, I could make a ton more money than renting the entire house. I know, I know, there will be more management time involved but I think it would be worth the money.
As far as my not-very-in-depth Google search has shown, I don't see any limitations or legal issues with renting per room on 3-6 month leases in Tacoma. I know there is an air-bnb restriction, but it looks like that's for super short term rentals....and you just need a permit for that. I don't want to jump into anything illegal.
Also, does anyone have experience with this sort of rental?
I've got a buddy doing that in Tukwila very successfully. He includes nicely furnished common areas, netflix, monthly cleaning, etc. to be all inclusive and avoid tenant drama with not keeping clean. Seems to be very attractive for students and the like and definitely can charge a premium. But those are 5-6 bedroom houses as well.
I'd definitely aim to be near a university as that will be the majority of folks in that market. I'm subleasing 2 rooms in my house in T-town for $500 a month. The tenants are great, but there wasn't a huge demand even at that price point so I'd be cautious.
You might want to head down to the monthly RHA meeting in fife and they'll be able to answer any questions you've got as far as the legal stuff goes.
Yeah Ill echo what Ryan said. I think you could potentially make a bunch of money however I also have to rooms I am renting out in Tacoma and 600-650 seems to be the top before interest fades, or totally goes to zero. Granted my house isnt an A house or an A neighborhood but its close to UWT, on a bus line, and walkable to 6th ave nightlife which seems like about the market youre talking about going into. Its fine for me right now but id probablly realistically be making around the same money by renting out the house as a whole unit as I would by renting by room and covering all the expenses. Taking into account the extra time it would take to manage a room by room rental, $200 extra cash flow wouldn't be worth my time.
Hey @Erin Caldwell ,
I know of a few investors who do well with this strategy. You need to make sure you follow the short term rental laws, or rent for longer than 30 days, as you noted above. As others noted, this strategy can be management intensive and introduces additional complexity. You also really need to know your market (or work with someone who does)! Feel free to reach out if you have more questions. : )
I have two rentals, one in Arizona and one in Oregon both are in college towns. Both properties are rented by the room (12 total) and managed from another state and for me, it runs very smoothly for the most part. It’s mostly rented to college students but there’s interest from other people as well. PM me if you like to know how I have everything set up, etc.