Who rents out a 5 bedroom home?

House Hacking
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Who rents out a 5 bedroom home?

Joseph S.
Investor · Washington DC/PG County · Member since 2019 · 7 posts · 5 votes

Hey BP, I'm looking to buying a 5bd single family home and renting out the rooms while I live there the first year. Assuming I want to stop househacking and rent it to a single family after that, I'm curious as to what kind of tenant this would attract.

I'm thinking of families who may convert a room to an office/gym or use one as a guest room. But if they can afford to pay $3-4k in rent, wouldn't they be better off just buying a house (in a more normal market than this one)? One thought is their credit may not be where it needs to be to buy just yet, but I don't know if I'd even be looking for that kind of tenant. Open to thoughts. 

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Nikki Stoddart
Rental Property Investor · San Francisco, CA · Member since 2015 · 49 posts · 20 votes
4y

Hi there!  Depending on your market, an interesting play could be to furnish the house and rent the rooms on Airbnb long term (30 day plus). Metro areas are great for this.  If you are near a college, tech corridor, or major hospital system, even better.  I started a 6 bedroom coliving house in the SF Bay area in 2018 and am getting ready to acquire a new 5-6 bedroom home out of state for the same business model.  Cash flow is amazing.

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  • Michael Dumler
    Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    @Joseph S., as you indicated, large families (co-living multigenerational) that are saving for a downpayment on their first or next home would be your ideal tenant. You need to verify that market rent for a 5-bedroom SFH is truly $3,000-$4,000 per month (that's a big spread FYI). Hope this helps!

    1Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Joseph S.
    Based on what you're saying it sounds like 3-4k a month is a lot for a 5bed. Not sure what market this is in reference to or how much the single family is. I guess without any numbers, the only situation I can think of where it might work is if the house is in a highly competitive school district and there is no supply there. Parents may be willing to rent at a high price to see their kids in that school district. If the neighborhood this single family is in doesn't have much to offer in terms of schools, people will probably go elsewhere like the suburbs or where the good schools are to buy a home or rent instead of renting an overpriced single family in a mediocre location without good schools.

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  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    I think it would depend on location. For example, near universities might be interesting because your tenants wouldn't generally stay more than 3-4 years while in school and you would be renting by the room. 

    But with this strategy, you could just fill the remaining room and move on. No need to rent out to a family until everyone moves out.

    1Reply
  • Nicholas Coulter
    Real Estate Agent · Southern California · Member since 2019 · 681 posts · 281 votes
    4y

    @Joseph S. If I were you I would keep it as a room rental after you move out. Assuming youre in an area thats high in demand you would be surprised at the tenant pool you will continue to attract! Those larger houses may get significantly less as one stand alone unit compared to renting out each room!

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  • Joseph S.
    OP
    Investor · Washington DC/PG County · Member since 2019 · 7 posts · 5 votes
    4y

    Thanks for all the answers gents!

    @Michael Dumler - Thanks for the tip!

    @Patrick Drury - This one's right outside of the Washington DC market, Rentometer shows about $4k for median rent for this kind of property. 

    @Rick Albert - property is near a big university. 3-4 years isn't bad for turnover, esp if you have good tenants. 

    @Nicholas Coulter - that's the idea. I'll have to see how much headache goes into doing this, but if it works, no point in changing it. 

    1Reply
  • Collin Wallace
    Homeowner · Joshua Tree, CA · Member since 2022 · 69 posts · 30 votes
    4y

    there is also the thought of renting the home out as commercial office space, a business might want to rent out the space for a period of time offering the space to workers to use as office space? 

    1Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    4y
    Quote from @Joseph S.:

    Hey BP, I'm looking to buying a 5bd single family home and renting out the rooms while I live there the first year. Assuming I want to stop househacking and rent it to a single family after that, I'm curious as to what kind of tenant this would attract.

    I'm thinking of families who may convert a room to an office/gym or use one as a guest room. But if they can afford to pay $3-4k in rent, wouldn't they be better off just buying a house (in a more normal market than this one)? One thought is their credit may not be where it needs to be to buy just yet, but I don't know if I'd even be looking for that kind of tenant. Open to thoughts. 

    Honestly with interest rates being so high I think you are likely to see a lot of middle class even upper middle class people forced into the rental market, and 3-4K in the dc metro isn’t even that expensive tbh. Regardless in the D.C. metro for a single family rental you’ll have zero issue getting an extremely qualified tenant.
    1Reply
  • Joseph S.
    OP
    Investor · Washington DC/PG County · Member since 2019 · 7 posts · 5 votes
    4y
    Quote from @Collin Wallace:

    there is also the thought of renting the home out as commercial office space, a business might want to rent out the space for a period of time offering the space to workers to use as office space? 


     Possibly....it's in the middle of a residential neighborhood...but maybe as the path of progress moves towards it

    0Reply
  • Joseph S.
    OP
    Investor · Washington DC/PG County · Member since 2019 · 7 posts · 5 votes
    4y
    Quote from @Jack Seiden:
    Quote from @Joseph S.:

    Hey BP, I'm looking to buying a 5bd single family home and renting out the rooms while I live there the first year. Assuming I want to stop househacking and rent it to a single family after that, I'm curious as to what kind of tenant this would attract.

    I'm thinking of families who may convert a room to an office/gym or use one as a guest room. But if they can afford to pay $3-4k in rent, wouldn't they be better off just buying a house (in a more normal market than this one)? One thought is their credit may not be where it needs to be to buy just yet, but I don't know if I'd even be looking for that kind of tenant. Open to thoughts. 

    Honestly with interest rates being so high I think you are likely to see a lot of middle class even upper middle class people forced into the rental market, and 3-4K in the dc metro isn’t even that expensive tbh. Regardless in the D.C. metro for a single family rental you’ll have zero issue getting an extremely qualified tenant.

     @Jack Seiden Agree, already seeing this happen. Interest rates also a double edged sword, if renting to single family, need rent to cover PITI

    0Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    4y
    Quote from @Joseph S.:
    Quote from @Jack Seiden:
    Quote from @Joseph S.:

    Hey BP, I'm looking to buying a 5bd single family home and renting out the rooms while I live there the first year. Assuming I want to stop househacking and rent it to a single family after that, I'm curious as to what kind of tenant this would attract.

    I'm thinking of families who may convert a room to an office/gym or use one as a guest room. But if they can afford to pay $3-4k in rent, wouldn't they be better off just buying a house (in a more normal market than this one)? One thought is their credit may not be where it needs to be to buy just yet, but I don't know if I'd even be looking for that kind of tenant. Open to thoughts. 

    Honestly with interest rates being so high I think you are likely to see a lot of middle class even upper middle class people forced into the rental market, and 3-4K in the dc metro isn’t even that expensive tbh. Regardless in the D.C. metro for a single family rental you’ll have zero issue getting an extremely qualified tenant.

     @Jack Seiden Agree, already seeing this happen. Interest rates also a double edged sword, if renting to single family, need rent to cover PITI


     Give it a few months you should see both rates and prices come down to where you can at least break even.

    1Reply
  • Grant Cox
    Member since 2022 · 3 posts · 7 votes
    4y

    If you rent by the room, you could list it on a site like Padmapper.com

    In the DMV area, we have a lot of immigrant workers who need to establish credit, and if you're flexible, that is a niche that needs to be served.

    I have one person right now in this situation, and without a lot of cash to put down or a guarantor (difficult for immigrants), they can find themselves in a tough spot.

    Likely, you can charge a bit of a premium if you are being flexible on credit.  (Location will be a factor due to variance of tenant rights)

    Often these immigrant tenants will treat a property well in my experience, but I do not own any investment properties, so take that with a grain of salt.

    If you end up renting this by the room, let me know as I come across these types of folks semi-regularly and happy to connect you.

    1Reply
  • Nikki Stoddart
    Rental Property Investor · San Francisco, CA · Member since 2015 · 49 posts · 20 votes
    4y

    Hi there!  Depending on your market, an interesting play could be to furnish the house and rent the rooms on Airbnb long term (30 day plus). Metro areas are great for this.  If you are near a college, tech corridor, or major hospital system, even better.  I started a 6 bedroom coliving house in the SF Bay area in 2018 and am getting ready to acquire a new 5-6 bedroom home out of state for the same business model.  Cash flow is amazing.

    3Reply
  • Cassidy BurnsBusiness Member
    Investor · Alexandria, VA · Member since 2016 · 860 posts · 460 votes
    4y

    @Joseph S. there will always be families in the DMV who are wanting to rent in homes with 3-5 bedrooms.  This is mostly because of the every 4 year of government change. I'd recommend a 4 Bed/ 3.5 Bath Single Family in Petworth or Brookland if this is the strategy you want to do.

    Best of luck.

    [email protected]540-960-1507
    1Reply
  • Joseph S.
    OP
    Investor · Washington DC/PG County · Member since 2019 · 7 posts · 5 votes
    4y

    - Thanks for the site rec @Grant Cox, was looking at Kopa which is similar. Will pm you.

    - @Nikki Stoddart would love to talk about your experience doing that. Sending you a message. 

    - This makes sense @Cassidy Burns, haven't thought about the government turnover's effect on the local market. 

    0Reply
  • Joaquin Camarasa
    Real Estate Agent · Springfield VA · Member since 2018 · 480 posts · 400 votes
    4y

    DC has also a pool of families that come for two- three years to work for the government or military and leave right after. A lot of them seem to think that is not worth to buy if they are only going to stay for one or two years and they decide to rent. The main train of thought is that they do not won't to have a property in DC because potentially they would have to manage it from out of state in the future and they do not want to be in that position.  

    1Reply
  • Ali Ally
    Member since 2022 · 10 posts · 4 votes
    4y
    Quote from @Grant Cox:

    If you rent by the room, you could list it on a site like Padmapper.com

    In the DMV area, we have a lot of immigrant workers who need to establish credit, and if you're flexible, that is a niche that needs to be served.

    I have one person right now in this situation, and without a lot of cash to put down or a guarantor (difficult for immigrants), they can find themselves in a tough spot.

    Likely, you can charge a bit of a premium if you are being flexible on credit.  (Location will be a factor due to variance of tenant rights)

    Often these immigrant tenants will treat a property well in my experience, but I do not own any investment properties, so take that with a grain of salt.

    If you end up renting this by the room, let me know as I come across these types of folks semi-regularly and happy to connect you.


    0Reply
  • Ali Ally
    Member since 2022 · 10 posts · 4 votes
    4y
    Quote from @Grant Cox:

    If you rent by the room, you could list it on a site like Padmapper.com

    In the DMV area, we have a lot of immigrant workers who need to establish credit, and if you're flexible, that is a niche that needs to be served.

    I have one person right now in this situation, and without a lot of cash to put down or a guarantor (difficult for immigrants), they can find themselves in a tough spot.

    Likely, you can charge a bit of a premium if you are being flexible on credit.  (Location will be a factor due to variance of tenant rights)

    Often these immigrant tenants will treat a property well in my experience, but I do not own any investment properties, so take that with a grain of salt.

    If you end up renting this by the room, let me know as I come across these types of folks semi-regularly and happy to connect you.

    Hi Grant may I have your contacts please, entertaining the very same idea but chickening out by not being able to put my number correct… I’m super new! Thanks! 
    0Reply
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