Is Padsplit worth it?
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!
Hey Brandon,
My husband and I own a few PadSplit properties and can provide some insight. We have had a couple evictions and I agree that the model is not the best for property owners. They have had talks about letting us approve members in the future but I'm not sure if it will happen or not.
For us the benefits of higher cash flow outweigh the costs of evictions when they do come up. Feel free to DM me if you have additional questions!
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.
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Developer
- GaREIA
@Brandon Rush. Josh Stanton is teaching a class next weekend. He's an expert and the landlord leader of those of us in Atlanta. You might consult with him or attend his class.
-
Developer
- GaREIA
@Rick Baggenstoss - thanks so much for sharing your experience. That's really helpful. Are you referring to Josh Stanton, the real estate agent? I just googled "Josh Stanton real estate" and he popped up. I'll definitely reach out, if so!
Quote from @Tiffany Vogel:
Hey Brandon,
My husband and I own a few PadSplit properties and can provide some insight. We have had a couple evictions and I agree that the model is not the best for property owners. They have had talks about letting us approve members in the future but I'm not sure if it will happen or not.
For us the benefits of higher cash flow outweigh the costs of evictions when they do come up. Feel free to DM me if you have additional questions!
Hey Tiffany, please check your direct message. I also have a property that I am considering PadSplit and wanted to get some insight.
Quote from @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!
Hey Brandon, did you decide to go with Padsplit? If so, how is it working out for you.
Hey @Errol Sadler - We haven't closed yet, but I'm thinking about using it as a house hack STR instead of padsplit now. If I switch up again, I'll loop back to this thread and update y'all!
Following! In the same boat considering going this route with a property :)
Quote from @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!
Hi Tiffany Vogel, I was just wondering if you need to have enough parking for everyone! Also, Do any of your properties have a septic tank?
Parking depends on where the home is located. If it's in a major city with public transit you can limit the number of rooms that include parking. We are in the suburbs so we make sure there is some kind of parking for everyone. This isn't a requirement but best practice since we don't have public transit.
We have two homes on septics. We made to make some upgrades to cover the number of people but haven't had any issues other than normal maintenance yet.
I hope this helps!
Quote from @Tiffany Vogel:
Parking depends on where the home is located. If it's in a major city with public transit you can limit the number of rooms that include parking. We are in the suburbs so we make sure there is some kind of parking for everyone. This isn't a requirement but best practice since we don't have public transit.
We have two homes on septics. We made to make some upgrades to cover the number of people but haven't had any issues other than normal maintenance yet.
I hope this helps!
@Tiffany Vogel Hey Tiffany! Thank you so much for you reply! Are your properties in Atlanta? I am looking into doing on there on an existing property. I am concerned about parking and how that would work parking more vehicles along the street. Any creative parking solutions?
Also, I was wondering I have a finished basement. But a couple of the "potential" bedrooms would have a door that opens to the garage. We don't have to use the garage for parking. But that doesn't seem like a good idea to me and would probably not be to code. Have you converted a garage yet to a bedroom or bedrooms?
Quote from B@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.
Hi Rick @Rick Baggenstoss, I am looking to convert my property to a Padsplit in Atlanta (Douglasville). I am wondering what is the name of the eviction service? Wha type of issues do you have with parking and the neighbors? Have the neighbors ever complained to the city/county? Thank you!
Ours are in Newnan and Lagrange. We have added parking behind the home on some of our houses or extended the driveway to allow for more off-street parking. The neighborhood often determines what you can do. If street parking isn't the norm in that neighborhood, I would try to find a different solution or consider not converting the property. The last thing you want to do is spend the money for a conversion and then get shut down by the neighbors or city.
Is there another way to access these bedrooms other than the garage? If that is the only entry point I would try adding a hallway to the rest of the home or look at a different configuration. If there are multiple doors then I'd just lock it in a way that makes the door unusable
Hey Brandon - I see this post is from a while back but getting some traction again.
For anyone else seeing this - Padsplits are a great way to cashflow and it's the only ways you can make rentals make sense with high leverage in this market.
Evictions are more of a property management issue than tenant issue. Key is to work with a team that focuses on managing padsplits as their core business.
Buy in solid neighborhoods where there is a good tenant base and put in experienced property management.
Happy to connect with anyone that has questions on the model.
"Evictthemforme.com" is who I used. They do the paperwork and connect you with a high volume (not high touch) eviction attorney.
I've never had complaints but my Padsplit is very well suited. It faces a commercial district and is walkable to mass transit. As you get into the suburbs, the expectations and the rules are different.
-
Developer
- GaREIA
Quote from @Tiffany Vogel:
Parking depends on where the home is located. If it's in a major city with public transit you can limit the number of rooms that include parking. We are in the suburbs so we make sure there is some kind of parking for everyone. This isn't a requirement but best practice since we don't have public transit.
We have two homes on septics. We made to make some upgrades to cover the number of people but haven't had any issues other than normal maintenance yet.
I hope this helps!
@Tiffany Vogel Thank you so much!
Quote fro@Tiffany Vogel:
Ours are in Newnan and Lagrange. We have added parking behind the home on some of our houses or extended the driveway to allow for more off-street parking. The neighborhood often determines what you can do. If street parking isn't the norm in that neighborhood, I would try to find a different solution or consider not converting the property. The last thing you want to do is spend the money for a conversion and then get shut down by the neighbors or city.
Is there another way to access these bedrooms other than the garage? If that is the only entry point I would try adding a hallway to the rest of the home or look at a different configuration. If there are multiple doors then I'd just lock it in a way that makes the door unusable
@Tiffany Vogel Thank you that is helpful! I was thinking I would just take out the door perhaps but great thoughts on parking!
Thanks for great article. Does PAdsplit manage tenant to tenant conflicts?