How difficult is it to fill a small 4 bedroom?

Question

Hello all,

I've been running the numbers on an attractive property in my area. It's close to downtown, and a major university in my city.

It's a duplex with a 4 bedroom and a 1 bedroom, and I plan on living in the 1, and renting out the 4 bedroom, or possibly filling in a spot in the 4 bedroom, if money is tight.

What I'm wondering is how can I account for vacancy with the 4 bedroom unit? Are 4 bedrooms hard to fill in student areas?

My expenses will probably be around $1450

The one bedroom rents at 600$, and I'm HOPING the 4 bed can fetch $1400~$1500. Does this seem reasonable?

All advice, and input is greatly appreciated

Roy N. · Answer

Adding to @Aaron Montague 's bathroom advise, I would also recommend you go with a 60 - 80 gallon, quick recovery water heater.  Young people consume lots of hot water.

We have a 5-bdrm student house which has undergone a significant energy efficiency retrofit ... but ~50% of the monthly electrical consumption is hot water.

Aaron Montague · Answer

How many bathrooms in the 4 bed side?

To many folks point, putting 4 people into a 1 bath place is just asking for trouble.  If you have more than 1, you should be all set.  If you plan on running a student rental, put in the heaviest duty bathroom items you can muster.  And expect to do a fair amount of work in there each time you turn them over.

Students aren't bad tenants, just clueless ones.

Roy N. · Answer

Similar in most jurisdictions in Canada (of which I am aware) ... if you live in the house, then you may be cut some slack about renting rooms.  Also, if it is your primary residence, you might still be able to obtain conventional financing.

Roy N. · Answer

Unlikely it will be viewed as discriminatory housing in Ontario, but quite probable it will be seen as a rooming house and, if that area of London is not zoned for rooming houses, he could have a regulatory issue.

The other Dylan will encounter is with {conventional} financing.  The Big-5 Banks, and many smaller lenders, will not take a mortgage on a rooming house.

Bryan H. · Answer

I have a 1150 sf 4/1 no garage, no basement and it rents very quickly. I thought it would attract families. It's been getting couples and single dads. All depends on the market

Jaclyn B. · Answer

@Dylan McLauchlan

Dylan,

Keep in mind that in some areas renting by the room can be considered a discriminatory housing practice because it could potentially prevent families (i.e. parents with kids) from renting. If you are going to rent by the room (or two to a room) then you may fall under boarding house regulations. These rules vary by location. Just be sure to check your local housing code.

Jaclyn

Dylan McLauchlan · Answer

@Roy N.

Thanks, those would be the best times to find student tenants

It's not quite walking distance from western. Probably about 3 km, but its right near a bus route.

I'll make sure to find out if it's seprately metered, and do more cash flow reasearch.

So far I've been assuming I'd pay utilities (I budgeted 500$/month which I know will be way on the high side)

Dylan McLauchlan · Answer

@Bill S.

Great info, thanks!

I'm going to try calling some property management companies, and see if they can spare some rent information. So far I've just been checking out rent online, but it's hard to compare apples to oranges

Roy N. · Answer

@Dylan McLauchlan

How far are you from the Western campus?  If you are close (walking distance) you should have no problems filling a 4-bdrm apartment.   We have 2 4+-bdrm student rentals ... May and September are your months in which they lease.  Unlike 1-bdrm and 2-bdrm, we have found the 3-bdrm and 4-bdrm student units are far harder to fill at other times of the year.

Are the units in this property separately metered?   Here the going rate for a "nice" 4-bdrm student unit w/o utilities is 1500 - 1700 a month.  With utilities that would move to 1700 - 2000 a month.   I would recommend renting the 4-bdrm as a single unit (as opposed to by the room).  Have a look in the neighbourhood and see what the prevailing rent rate is ... here it works out to ~400 - 425/rm w/o utilities and ~450 - 500 with utilities.

Be certain to run your analysis with low revenue and high expense assumptions to see if the property will carry easily and well.

How difficult is it to fill a small 4 bedroom?

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