Is Padsplit worth it?

[Brandon Rush]

Hey team,

I'm looking into buying a property in ATL and using it as a Padsplit because I love the potential to make greater returns with their rent-by-the-room model.

The big hesitation for me is that they screen and place tenants, but don't manage evictions. Giving someone control over who gets into my property while maintaining responsibility of kicking people out seems a bit risky. The rep says that evictions only happen 3% of the time. That's low, but not zero!

I haven't heard from an actual owner of a Padsplit (reviews from tenants are hit or miss). So, would love to hear from this investor community!

[Rick Baggenstoss]

I've had a 7 BR Padsplit for nearly 3 years with no evictions.  Pretty good considering COVID was happening for 2 of those years, and I still got paid.   Members/Tenants pay weekly, so reaction time to payment problems is pretty quick.  I've certainly had tenants get behind, and in one or two cases, they left owing 2 - 3 weeks rent.  Not a big deal in a 7BR house -- you're a little more diversified.

Evictions do happen.  They use an eviction service for serving the tenant and coordinating with the courts.  This service also subs the legal work out.  It just so happens, I use both of these services for the properties I manage, so I'm happy with the selection.

The bad news is that evictions can become contagious in a house.  If one person stops paying and it's tolerated, It's more likely to spread within the house.  Quick response and a fair cash-for-keys offer is still the fastest and least expensive way to get someone out who isn't paying.