How much to charge a couple versus a single tenant?

Question

Hey BP!I’m wondering what you guys might think is an appropriate rate to charge a couple for a bedroom that I would otherwise rent to a single person for $1000?The bedroom has a private bath and is coming furnished with a queen bed, night stand, dresser, desk, desk chair, and rug. Always appreciate the input!

Andrew

Randall Alan · Answer

@Andrew Dincola

If the space is capable of supporting a couple - which it seems like it does, I don't see charging extra.  Sure, they will use a little more water.  But water is $6/1000 gallons... maybe $12 with sewer charges.  Maybe an extra $25/month if you are trying to compensate for utilities.  It just doesn't seem like it's excessive use of the space, so I'm not seeing charging extra (myself).  You are renting the same space (in my book)... I would think your charge of $1,000 could absorb the extra utilities.

All the best!

Randy

Randall Alan · Answer

@Andrew Dincola

For me, you are renting a room.  Maybe think of it like a hotel... They include 2 in the base rental, and above that they start charging.  I guess I'm in that camp.  There is an expectation of what a 'reasonable occupancy' is.  At the end of the day you can obviously do what you want.  But I think I would be sure to advertise it that way up front.  No one is going to complain if you call that out up front, like "Room for rent, $1000 plus $50 extra per additional person, limit 2 people".  If, on the other hand, you said "Room for rent for $1,000" and now you want to charge extra for the extra person I don't think that sits nearly as well with a prospective tenant.   I really think the best way is to price it for the maximum occupancy and not get caught up in all the minutia of 1 or 2.    It's just sort of nickel and dime-ing your tenant to me.  Ask yourself this though:  What happens if they get pregnant and now there are 3 and a baby?  How is that going to impact your experience?  Baby wailing at 3am!  lol!  (have fun!)

All the best!

Randy

Eliott Elias · Answer

The rental rate should be the same.

Randall Alan · Answer

@Andrew Dincola

I wasn’t trying to suggest a price.  I’m a long term rental guy and don’t do by the room rentals.  Suggestions were mostly for perception purposes.  The $1,050 was just a “if you have to charge more, don’t go crazy idea… cover the increased expenses.”  But with that said, you are the one that has to live with the extra person.   Charge what you think it is worth it to you.  Plus, you can use a higher fee to discourage 2 people if you wanted to.  Maybe you mark it for $1,200 for the 2nd person  because you really don’t want 2 people, but if they will pay that much you’ll deal with it.

You get to set your prices.  It’s sort of a  “what viewpoint” are you coming from.  You are coming from the inconvenience perspective.  Mine was initially from the “prospective tenant” perspective.   But I can see both sides.

Randy

Andrew Dincola · Answer

Hey @Randall Alan, thanks for the thoughtful response and I can see your justification behind it.

Would you not account for the affect that 2 persons has on the household and the shared spaces as opposed to 1 considering this IS a shared space?

For our other tenants, as well as for my fiancée and I, having an additional presence in the house certainly modifies the living experience. More people cooking/sharing a kitchen, more showers being taken affecting hot water consumption, more persons to occupy one of the couches or tvs, more personalities to adapt with and keep consideration for, etc., plus the utilities you mentioned- water, Wi-Fi, shared amenities such as paper towels and soap etc.

I’m not trying to be combative, as your point makes sense. I am wondering, however, if this information changes your perspective?

Ryan Thomson · Answer

@Andrew Dincola I would charge at least 1.5X more. It is super annoying living with more people. More people in kitchen, more dirty dishes, more fridge space. Your other bedroom renters won't be stoked to learn that if they just bring another person into their room they could cut their rent in half.

Andrew Dincola · Answer

Ah, right! So in our listing we state that “we’re looking for a single roomate. If you’re a couple feel free to inquire. We’re not opposed to negotiating accommodations for two!”

So it sounds like we’re on a similar page. We’ve advertised accordingly and they’re aware that we will charge extra for the additional person.

With that squared away- Am I hearing you correctly that you would be charging $1050 in this circumstance?

Sam Yin · Answer

@Andrew Dincola

Based on all the concerns, why not just keep the add up until you find a single person? It will take all the headaches away.

You have laid out scenarios that you are concerned about and what accounts in your mind to costs. Others have mentioned that the room is just that, a room at a set price. But I think a single occupant will solve your dilemma.

That is because you will likely find that double occupancy comes with double the personalities you have to deal with. This is a people business. That is the value of your Landlordship... the ability and time it takes to deal with the amount of people to rent to versus the amount of rent you collect.

Alecia Loveless · Answer

@Andrew Dincola Ordinarily I would say charge the same, but I recently had a house where there was 1 tenant in a 2/1 SFH. He was severely under market rent and I was about to raise the rent some. Out of the blue I got a text requesting for his new girlfriend to move in and I said she’d have to go through screening and there would be an additional charge plus I was raising the rent, and got no pushback as the unit is still well under market rent.

Use your best judgment based on the size of the unit and what you think additional wear and tear will be based on what you normally rent it for and additional water/sewer/utility costs that you as the landlord will incur.

How much to charge a couple versus a single tenant?

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