I just purchased a house in need of rehab for 68K..4 beds and 2 baths. ARV should be around 125. I should have about 100K in it totally when finished. I paid cash for the property, but plan on taking out a loan once the rehab is complete. I have a partner, so I will be actually selling the property to him. Our goal is to pull enough cash out to make up for the initial down payment.
Does anyone rent out rooms? The layout of this property is very nice and I can actually rent out each bedroom for around $650 per month, making the rent a total of $2600 per month. This will be my first buy and hold property and would love some feedback.
Renting by the room to 4 unrelated parties with all the drama of them having to get along with3 strangers.....no thanks. But, that's just my personal oil pinion.
I do this on one of my rentals - 4 bedroom, 2 bath. We tell people that they are "all in" for their rent. It covers rent, heat, water, internet and cable TV. We also furnished the living room and kitchen and include basic dishes, cutlery and cooking pots and pans.
It's intended to be a one-stop shop for folks who are looking for a relatively inexpensive, yet nice place to live where they don't have to worry about anything.
They mostly keep to themselves in their rooms, but they've regulated the communal spaces themselves. They've got laundry time pre-scheduled with a weekly signup sheet that they created and posted in the laundry closet. They've assigned themselves fridge and freezer and pantry space and have worked out a system for the shared expenses for things like dish soap, paper towels and toilet paper. I don't even know what it is, I just know that I see notes on the fridge to each other to communicate stuff.
Each person is on their own lease and it is specifically for their bedroom with an indication and a description of the communal spaces they are permitted to use. Each bedroom door has a separate key. I have told them that I will treat their bedrooms like I would a separate apartment. I will give them proper legal notice to enter the bedroom, but I have full access to the communal areas as well. They leave their rent in a lockbox in the kitchen that I pick up once a month. They also leave me a To-Do list of small repairs that are needed and I take care of them when I pick up rent, if necessary.
I absolutely refuse to get involved in their interpersonal issues. Loud music or TV, messy bathrooms, sinks full of dishes are not my issue and they are to work it out between themselves.
This is easily my most labor intensive property, but it is also the most profitable.
I have thought about this as well but it does seem like you would have a difficult time finding tenants that get along and clean up after themselves. If you are ok dealing with roommate debates as they will come to you then it is a valid way to make a little more money off of the property.
I rent by the room but first spent some time thinking through potential conflicts and finding solutions. It's very doable, especially if you have a housekeeper on a weekly/bi-monthly schedule.
Very profitable, BUT you need to be innovative and proactive.
I thought about doing this, but ran into some boarding house restrictions in my area. You may want to search your local city/county code to be sure you can do this and/or what will turn you into a boarding house. I also found a lot of good info searching the forums here.
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