Investor · Atlanta, GA · Member since 2013 · 922 posts · 336 votes
Several years ago I have a friend of mine introduce me to a concept I would like to share.
Here it is
A 4 Bedroom home where i live can easily rent for $1100 to $1200 per mo. Purchase price on this would be around 90k.
But what if you take this same home and rent rooms?
In this same area the rooms rent for between 400 to 500per mo.?
Look at the cash flow difference. What he did was this concept called "transitional housing".
Transitional housing is where people who need to move to an area for a period of time typically for job purposes. What my fried did was take this concept and charged more rent by paying for utilities (water, gas, power) also he furnished his houses with beds and dressers.
As a result, he bumped his rents from $400 per mo to $650 per mo. He's up to about 6 or 7 houses now and is doing great.
The other thing that this concept solved was non payment of rent. If 1 renter stopped paying rent, there were 3 others that were paying it.
This is a great concept anyone can apply in their own cities.
Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
10y
Make sure you research boarding house ordinances and laws in your county/city/state. There are some places where that's illegal on as small as a county-by-county level. They'll generally fine you and force you to evict if they catch you.
It's also far more management and turnover, which can be fine if you're doing it yourself, but don't expect to hire a PM to manage it for a reasonable fee...though I suppose if you get enough units you can hire a fulltime one...