3br & 3bth, Four Friends

Waco, Texas
General Landlording & Rental Properties
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3br & 3bth, Four Friends

Hunter CoppPro Member
Waco, TX · Member since 2021 · 6 posts · 1 vote

If you have a 3br & 3bth townhome and the new potential tenants are four friends who want to share the bedrooms, is there anything in violation if you rent it out to the four and let them share the rooms. Is there anything against four tenants and three bedrooms? 

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    This is common with college kids, they'll share rooms to get cheap rent. I've seen 4 students split a room. 

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Hunter Copp:

    If you have a 3br & 3bth townhome and the new potential tenants are four friends who want to share the bedrooms, is there anything in violation if you rent it out to the four and let them share the rooms. Is there anything against four tenants and three bedrooms? 


    There's nothing illegal about it, but it's a huge risk.

    You typically want tenants to make a combined income of 3x the rent but that becomes dangerous once you have three or more unrelated individuals pooling their resources. 

    Example: I had a property listed for $2,000 a month. Five friends applied together. One of them made $4,000 a month. Two of them made less than $1,000 a month. The remaining two were unemployed. They made a combined income of $6,000 which met my requirement, but what happens if the primary bread-winner gets tired of the free-loading friends and decides to leave? The remaining four tenants only made a combined income of $2,000 and suddenly the property is unaffordable, so they would all leave. It is very common for people to pool resources and rent something they normally couldn't afford, but these relationships often break up and the Tenants are often low-quality. Four kids don't know how to maintain a home and it's more likely to result in damages, drama, early termination, or other problems.

    My policy is that applicants need to make a combined income of 3x the rent. However, if there are three or more unrelated individuals, each individual must make at least 2x the rent. That ensures one of the Tenants could leave (this is very common) and the remaining tenants could still afford the property. Since implementing this policy five years ago, I've cut down on the number of people pooling resources and it's dramatically cut down on the drama and problems.

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  • Jared HottleBusiness Member
    Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
    3y

    Also will want to check local tenant laws. The college town in my area requires an off street parking spot for every person over 18 occupying the residence not necessarily a parking spot per bedroom. I do find this very common with college kids.

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