Rent-by-the-Room or Crashpad Near Newark Airport — Feasible? Workarounds? Cash Flow?

[Charles Lundquist]

Hey BP Community,

I’m in the process of acquiring a multifamily near Newark Airport (EWR), likely a triplex or quadplex. My primary strategy is to explore rent-by-the-room or set up a crashpad model for flight attendants, airline workers, pilots, etc. — since there’s strong demand for temporary housing near major airports.

I know NJ has some tight regulations around rooming houses, boarding houses, and hotel licensing, so I'm trying to navigate this carefully. My main questions:

1️⃣ Feasibility:

• Is this a good idea near EWR? The airport workforce seems like a solid tenant base — stable jobs, high turnover, predictable demand.

• Anyone here have experience doing crashpads in NJ? How aggressive are inspectors/zoning boards in Union/Essex counties?

2️⃣ Legal / Licensing:

• NJ DCA has licensing requirements for rooming houses — are there legal workarounds if you're only doing it within a legal 3-4 family? (Ex: longer-term leases, exclusive bedroom use, shared common areas, etc.)

• What’s the “grey zone” that stays compliant vs. full-on rooming house violations?

3️⃣ Management Model:

• Ideally I'd furnish the units, rent by the room, month-to-month or flexible leases.

• Tenants would mostly be airline crew who rotate in/out, but I'd also consider travel nurses or corporate crashpad style if needed.

• Property would be owner-occupied for FHA loan purposes to start.

4️⃣ Cash Flow:
Assuming a 4-unit at ~$700K purchase:

• Traditional rent: ~$6,000/month (mix of 1-3BR units)

• Rent-by-room / crashpad model: Could bump gross rents to ~$8K–$10K/month if fully optimized.

• After mortgage, taxes, insurance, and utilities — possibly $2K–$3K/month in cash flow, with higher upside if turnover stays low.

5️⃣ How to Get It Done:

• FHA 3.5% down to start.

• Conservative underwriting to ensure property works as a traditional rental first.

• Build out one unit as a crashpad while keeping others as standard rentals to test demand.

• Use fully furnished, automated systems (code locks, turnover cleaning, etc).

Would love advice from:

• Anyone running crashpads in NJ

• Investors near EWR or other major airports

• Landlords with experience navigating NJ’s DCA rules

• Creative legal/operational workarounds

Am I thinking about this correctly? Is it worth it, or better to just keep it simple?

Appreciate any input — thanks!