Duplex- Month to month by bedroom.

[Neil Hauger]

Here is the situation. I’m looking at buying a duplex. Currently under rented for the market by an easy $500/ mo. I can get it to cash flow really well if I were to rent one side by the bedroom. $700/ bedroom ($1400) . Month to month is my plan. The other side has a mom and two kids. My kind heart doesn’t want to put her out in winter. I’d rent to her for $900/mo. 12 mo lease. Which is still a great deal. Eventually I can get this unit to $1200/mo with upgrades. My wife says I can’t do that. I’d be discriminating as she gets two bedrooms for $900. The other side has to pay $1400 for the same place. My answer is “so what?” They don’t have a yearly lease. They pay monthly. Is my argument fair? Is there rent police going to jump on me?

[Casity Kao]

@Neil Hauger I personally don't like the rent units by the bedroom because if there is damage to common space it's going to be really hard to figure out what to do next, so if you do that figure in a higher CAPEX. I don't think you will have a problem with discrimination as you did not place the tenants in the first place, so your argument would be that you just managed the existing tenants by incrementally raising rents to keep a good renter. If you are renting by the bedroom on one side it is also a completely different situation because effectively you are renting out 2 one bedrooms versus a 2 bedroom. Most markets, a 1 bedroom is not 50% of the cost of a 2 bedroom.