I'm currently in progress on finalizing a contract on a SFH that is currently being rented out by the room.

Right now there are 7 tenants all living in a single-family house. The house is in need of some TLC and I'm intending to do some minor rehabbing to improve the living conditions for the tenants.

I'm wondering if anyone here has had any experience with per-room rentals and if they could share any gotchas. The current owner gave me a few bits of information:

1. Personalities: some times tenants will clash with each other and you'll have to deal with the drama. Either pay the problem tenant to leave, or find a resolution.

2. Vacancy: because it's rented by the room for cheap, I'm expecting a higher vacancy rate. To be on the safe side, I put a 20% vacancy into my calculation numbers.

3. Getting rooms rented is a matter of posting a craigslist ad. The current owner says he receives 2-3 inquiries per day, and usually places a new tenant within a week. Does this seem typical to your experience with per room rentals?

4. Students: given the time of year, you might get more student renters near the beginning of school. Students are typically more reliable with their rent and cleaner (this is based on the current owner's experience).


What are your experiences with the per room rentals in Houston? Do they cash-flow well for you? Is the management worth the cash flow?