Anyone renting per room with success? Do they stay long? I have a 3 bed, 2 bath house in Denver Metro area I rent to a couple (no kids) for $2,000 per month. I could propose to them I rent the downstairs room for $800, and the couple pay $800 each, $1600 combined. Their rent would go down $400 and my cash flow increases $400. A potential win-win situation, provided everyone gets along.
I’ve never done a rent per room model but I see more profits. Any thoughts?
I know, right? Wouldn't it be so awesome if the paper profits we can dream up were actual in the real world? That would totally rock!
And you could propose this idea to the couple and they could say no, and then go and do it themselves and reduce their own rent to $1,200.
Or they could say yes and then be calling you 24/7 about the new tenant. Or they could report you to the city. Or...(fill in this blank).
Anyway, the answer to your question is, "No, don't do it!" It's wrong on so many levels, and for reasons that will come back to bite you.
I’ve heard of landlords succeeding with this model. This of course would only be done if the current tenants would be comfortable doing it and be first to choose the tenant. I’d have to approve with my policies too and the room renter would be on the lease.
I’d like to hear other replies. Thanks.
I may be wrong, but this sounds more like a job with many moving parts; this model is more successful with college students who are younger.
I’m not suggesting it won’t work, but it won’t be easy as it looks in theory.
To your success!
It's called house hacking and many of my clients have done it for years without major issues. You'd just have to see if they would pay $1600 to live in a basement. I wouldn't.
Some cities limit the number of non-related people living in the same unit. Be sure to check on those laws.
Also, how would you handle an eviction if one group decides not to pay? If the house is still considered a single unit, would your state laws require you to evict them all? What would the hassle factor be even if you did not? I'm imagining the folks upstairs not paying and creating all kinds of drama with the folks downstairs....
Seems like it "could" work but there are lots of details to work out. "House hacking" is a little different in that usually the owner is also an occupant. In this case, if I'm understanding correctly, you'd basically be turning the house into a rooming house and/or making them like roommates, but without a jointly and severally liable lease?
I think it takes a special kind of person to be okay with a living situation like this. Would those kinds of people also be desirable tenants? Something to ponder...
Another thing to consider is utilities. Do you pay all of the utilities? How would that be split if not. Where is the washer and dryer? Is it in the basement? Would current tenants be able to still use it? Is there a separate entrance? Could you put one in? Maybe something to consider when the current renters move out.