Tips on filling a rental room by room

9 Replies

I am looking for advice from anyone who has done this or something very similar. All tips appreciated!

I recently purchased a 4 bd 2 bath house in Arizona with the intention to create cash flow. The going rate for a single family to rent is around $1,900 - $2,100 a month in the area. However to create the desired cash flow, I am looking to rent it out per bedroom. The going rate per room is an average of $600 a month for young professionals, which totals $2,400 a month on the low end.

Ideally, I will find a group of 3-4 friends who would like to live together and each pay $600 a month per room (this is what I was doing before I got into REI). However, this group may not come up in the month that I will be searching for tenants. In which case I plan on getting one person in there first, letting them have about $50 a month less on rent on the condition that they stay in close touch with me and give me house updates to create a strong relationship with me to prevent any problems.

Has anyone done it room by room or found a group of friends/coworkers to do it this way? 

I've got a friend doing a similar strategy in the PNW by building 5-6 bedroom houses and nicely furnishing out the common spaces then renting individual rooms for 900-1200 per month. That includes the utilities, housekeeping, netflix, hulu, internet, etc. Basically, all the stuff that makes it easy for a young professional to show up with a bed and dresser and be good to go. I think the leases are for a year and the tenants are unrelated parties, but he puts a lot of effort into creating a cohesive group and makes a killing at it! It takes a bit more work on the management side, but if you're buying locally and it's worth the extra time, then why not go for it. 

@Cat R.  I'm not the one doing this. It's a friend of mine. But I don't know why you'd treat it much differently than a standard lease with all the background checks, deposit, etc. 

@Chris Trefry is it legal in your area to have that many unrelated people living in a single family house? I think a lot of places have limits on this kind of set up. Probably hard for the city to enforce but something to look into.

This is a great idea! A certain way to increase your cash flow - renting the home on a per bedroom basis rather than the whole house. I love this! You would need to be prepared for scenarios where there are only 3 tenants instead of the maximum 4, when the cash flow would dip,

Good luck,


@Chris Trefry how is it going so far? Is your rental room-by-room investment working well/exceed your expectation? Do you self managing it yourself or you hire a property manager company? 

I am actually thinking about doing this too in FL. In term of the lease to individual, I would do the whole background check as you normally do with sfh to be in the safe side. I am planning to charge security deposit, first month rent, and last month rent as well (the same as what I did to my rental condo property).

Best of luck!!

Thank you guys for staying active on this thread and for checking in to see how it is going! I am happy to share my experiences thus far. 

Overall, I would say this type of rental split has been going really well! It has been 5 months of managing the property with 4 rooms each rented separately. 

The process of getting the house filled was a bit of a headache, it took about 30 days total to find someone for each room that worked and wanted to stay for at least 6 months. There were many screening calls and interviews conducted to make sure that these people were serious and would take care of the house. 

Since the house has 1 master bedroom and 3 regulars, I charged more to the tenant in the master but also made him my main point of contact for the house. He is the one who will text me if anything is up and will keep me informed on the status of everything. 

There was already 1 situation that arose in February where I ended up kicking out one of the tenants because of illegal activity in the house, however, this process went as smoothly as I could have hoped for and there is a new person ready to move into that bedroom on April 1st. 

So to Account Closed I highly recommend it! Just know that it will be about a month of work up front and then you can expect to get contacted by the tenants at the house about minor things once every 2-3 weeks. 

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