Rent by room in Greater Seattle area

[M Shah]

Look forward to connecting with investors/property managers who rent by room. We can all share the pros and cons, learnings, laws around rent by room in Seattle/Redmond/Kirkland/Bellevue. I have been exploring rent by room lately and happy to exchange the knowledge.

I will start with some gotchas:

Lease: Two ways this can be done 1) Master lease and put each tenant on the lease, that puts peer pressure on everyone to pay the rent, keep the property clean etc. 2) Lease separately for each room, flexible renting and everyone isn't bound to others' wrong doing, tenants might prefer this.

Utilities: Three ways I have seen people managing utilities 1) Include average utility cost in rent and take care of all utilities yourself and have a cap at max utility after which tenants chime in 2) Utilities are paid by tenants but that could cause issues when renting by room and one person is overutilizing electricity etc. 3) Fixed cost of utility charged to tenant monthly and anything beyond that is paid by landlord

Prospective tenants for rent by room: 1) Students attending nearby colleges, put all of them on one lease and have them find roommates, put their parents cosign the leases, 2) Traveling nurses, they're catch all when comes to rent by room but usually short term, 3) Rent out by room to any individual professional, this creates more management overhead but keeps vacancy low

Common Areas: Try to setup such that common areas are avoided by tenants as much as possible. Some ideas: 1) put mini fridge, desk, chair, wardrobe, bed in each room. 2) Buy all common stuff such as toiletries, kitchen utensils, cleaning stuff.

Cleaning: Arrange cleaning service twice a month at landlord's expense, this not only keeps the house in great condition but also can be leveraged to inspect the house.

Laws: City of Seattle allows upto 8 unrelated persons in a SFH, so does Redmond and Bothell. Does anyone know about Kirkland? How much is this code enforced generally?

[Sherief Elbassuoni]

@M Shah, thanks for compiling the list. These are my two cents based on my properties:

Lease: I tried both. I do one master lease when I get a group of friends (or young professionals) who have similar start/end lease dates. For example, they friends and know each other for years and the whole group is moving together to the house at the same time. The whole group will also terminate the lease together. This worked well for me during covid since I got a couple of tenants who went through furlough (in a group of four). They just borrowed money from their friends and they were still able to pay me to rent even when there were on furlough. If they are not friends with similar situations, I just rent a separate lease for each individual.

Utilities: It depends. If you are talking about 6-8 rooms in the house, it is way easier for the landlord to pay utilities and just reflect that in the rent. If we are talking about one or two rooms, you can think about a split or a ratio based on head count. 

Prospective tenants for rent by room: If I did not get one group who is interested in the whole house, I put it on Craigslist and FB market place and rent to someone who fits the criteria (Credit score, no past eviction, income equals 3 times the rent, ......). Just notice that many international students may not be able to get you a co-signer because their parents are overseas.

Common Areas: I put a mini-fridge, desk, chair, bed in each room. I also provide toilet paper, kitchen towels, .....

Cleaning: I send someone to clean once a week, or once every other week

This is what have been working well with me. 

Best of luck!