Acworth, GA · Member since 2017 · 51 posts · 22 votes
Curious to hear opinions on the BP Community's experience with rentals. I am under contract on a 2/2.5 Townhouse that I will be renting out. It has a great roommate floorplan with all living space downstairs and two master suites upstairs. Current tenant has paying $1200/mo because she has been there a couple years, but market rent is now between $1300-$1400. I will be closing at the end of this month, so I have not started marketing the property for rent yet, but I was also considering renting it out as a roommate scenario for $800-$850/person. My guess is that renting it as a single unit would carry less potential stress/hassle and possibly less vacancy. Would love to hear your thoughts?
Rental Property Investor · NY · Member since 2018 · 126 posts · 42 votes
7y
@Duane Gunkler. This is definitely a subjective answer. In terms of vacancy, if you're renting out the entire townhouse, it's either going to be 100% occupied or 100% vacant. By renting out the rooms individually you're actually theoretically limiting the likelihood of 100% vacancy because you are less likely to have two rooms empty at the same time.
The theory will depend on the demographics of you're area, if the townhouse is in a very suburban neighborhood, or in an area with a lot of studio apartments, it will probably harder to rent out two single rooms than say in a college town. If you're curious if this is possible, do a "test" advertising on craigs list and see how many responses you get for the singles vs someone renting the entire location out.
For my perspective the extra $200 per month would not be worth the hassle unless the market catered to that (i.e college type town). But I would start to consider it at $300 per month and up. At some number the "juice is worth the squeeze".
Another thought is to reach out to a great property manager and pick their brain.