Another way to make outsized money from property?

9 Replies

I have 7 units. There is a sense of running ragged, and I'm absolutely nothing from December until April. So cash flow is hard then.

so I have started  trying to rent out rooms  in a couple of two and three bedroom apartments. To diversify.

there is a lock on each bedroom door and the people will share the living room and dining room and kitchen and bathroom. They will be responsible to work out how to keep it clean.

I got my first person I believe, she is on complete disability and doesn't make a whole lot.

it is only for one person and I tell them they're only allowed an overnight visitor once or twice a month. I furnish a trundle bed, with a bed underneath available for a visitor.

the apartments are already beautifully furnished and stocked for vacation rental activity, so it doesn't seem like a hard sell.

this only works in a normal area that has some local demand for housing. We also have an active tourist Market in this small town.

so anyway, if a 2 bedroom apartment projects to be about 17,000 a year and income, I am renting each bedroom for 119 to 149 weekly depending on size. I also charge them a small amount each month for internet and they can get free streaming services such as tubi or xumo or Pluto or IMDb. They each pay half of utilities.

so I project almost 13,000 a year, I don't have to run around like a madman, I don't want to pay self-employment tax, cheaper insurance, they pay utilities and some of Internet.

I put ads all over Craigslist Andrew rental services, but the two people who seems serious so far came from an ad in the local newspaper!

. Based on local apartment rental rates, I think I will be getting about 50% higher rent. In a sense, when all is considered, I think I will be making almost as much as a vacation rental without all the work and grief.

I am allowing a few months to get the units I chose to convert fully rented with reasonable people. Not everybody wants to share apartment space, but some are open to it

Opps, looks like you're doing short term rentals.  My post was assuming you were doing regular month to month or year leasing.

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The experiment is to convert some of my vacation rentals to long-term rentals as described above.  I believe I can make almost as much all things considered  and have a nice diversification to the vacation  rental model of the other units

Originally posted by @Erik W. :

Opps, looks like you're doing short term rentals.  My post was assuming you were doing regular month to month or year leasing.

Hi @Ken Latchers ! It sounds kinda like what Paul Sandhu is doing. Not oil rig guys, but renting available rooms to folks. It really works for Paul and I don't see why it won't work for you.

I guess the only thing to worry about would be that one person who could annoy the rest and cause them to move.

What about offering some value add services like weekly maid service for the communal areas? That could solve any issues with the place not being kept up and when split between 3 renters could be a money maker for you.

This sounds like you are going to attract a lot of down and out people.  Someone going through a divorce, someone just getting out of rehab, traveling salesman, that sort of thing.  It's just temporary housing until they get back on their feet.  I think there is some sort of market for this type of housing in just about every market in the country.  Question is, will they be able to pay the rent?  That just depends on the renter.  The person going through the divorce, probably.  Rehab graduate, maybe.  See if anyone else in your market is doing the same thing.  If they have vacancies, adding more of this type of housing to the local market isn't going to work.

@Ken Latchers

This is really a more modern version of the “rooming house” concept. Increased turnover, collection issues, friction amongst boarders, zoning and increased maintenance costs as well as more intense management cut into increased income. Brings a passive investment into the active investment category, or possibly even the “business vs investment “ category. May result in more net income, but that has to be weighed against the increase in time it takes to manage.

It all depends on your goals and reasons for owning real property.