What are you experienced renting by the room? - Househack

Question

It always intrigue me that people are willing to do house hacks without an ADU or an additional living unit. It seems crazy to me to share the same refrigerator and thermostat. Seems like a constant headache and argument...

What are your thought/experiences?

Anthony Swain · Answer

Hey @Alan Asriants

I agree with @Jake Andronico & @Daniel McDonald, it isn't for everyone, but it can certainly help those that do it. I'd say it can be a major hack for a younger person that wants to subsidize mortgage with room mates. I was on the other side of this as a renter in my early & mid twenties. Looking back at it, I wish I owned the home and rented out the rooms instead. I most certainly would have been further along in my investing career.

Many argue that I couldn't imagine doing it with a family. Once again, it isn't for everyone, but the sacrifice can be rewarding in the long-run. I personally know several families with spouses and children that rent out a portion of their home (finished basement/private entrance room, etc.) that offset their mortgage substantially. This allows them more financial flexibility, more discretionary spending, working less, and more time with loved ones.

There were my two cents. Haha

Daniel McDonald · Answer

It’s college living. Except instead of spending a fortune you’re building wealth. Definitely not for everyone but if you can sacrifice for a little while, why not?

Alan Asriants · Answer

I guess to each their own right? Its good to know that people have good experiences. It is not up to me to judge what is ok for someone else. But there is certainly a "im ok with it" side and a "im not ok with it side"

Just depends where you fall...

Sarita Scherpereel · Answer

Definitely less structure. And harder to work through those details with traditional lenders.

Daniel McDonald · Answer

Yes you do…as you should for any rental. Don’t skimp on screening or you will pay for it. Literally and figuratively.

Sarita Scherpereel · Answer

Whenever I see properties that are being sold by an owner who did SROs they are usually in rough shape. The better ones seem to have a dorm room structure of cleaning and caring for the units with chore assignments. It does seem like the owner is less of a landlord and more of a glorified RA.

If you can find the right tenants and live there as long as possible to make sure care is given to the space, I believe that will go along way.

Just be careful about the lease structure when you get ready to sell. Having leaving leases line up so that any future owner can easily move in or even get financing is ideal. It will help with your exit strategy...down the road. Definitely ask your realtor in your market about that. Please give advise on here based mostly on the thing they see in their market and experience. I'm in also in a large city- Chicago. It's wise to think about these things even if you're 10 years away from selling. Best of luck!

Jake Andronico · Answer

@Alan Asriants

Most people think this way, which is why it's a massive opportunity in my opinion.

I've done it twice in Reno, NV and it's changed my life and boosted my net worth significantly.

As @Daniel McDonald said, it's college living and definitely not for everyone.

But, if someone does the same thing as everyone else, and expects different results, would it be unreasonable to call that crazy...?

Alecia Loveless · Answer

@Alan Asriants I lived among guests at my two B&Bs for 25 years. Some regular overnight guests and some were people who stayed with me from anywhere from 20 nights in a row to a couple of 6-9 month stays.

I only had a real problem 1 time during those 25 years when I ended up with a full house (22 guests) and two of the rooms were from a different culture that stayed up late into the night and ended up annoying the other guests stomping around and making noise.

It was never a problem with the extended stay guests that were sharing my kitchen. We simply all respected the space when someone else was cooking. I also had a good sized regular fridge and a decent sized mini fridge which made sharing fridge space easy.

People bought what they needed for groceries for 2-3 days and then would go shopping again. No one hogged the space.

One of the perks was that I ended up with a great spice cabinet because a lot of the renters would simply buy whatever spices they wanted (often duplicates of what I had) and then just leave them all when they left.

Occasionally someone left the kitchen/living spaces messy and I would have to do a bit of extra cleaning but not often.

Alan Asriants · Answer

From agent side def agree with lease structure when it comes to selling. I wouldn't recommend that my sellers still have rent by the room lease options in place. Also pretty certain you have to have the proper licensing in most area to do this kind of lease structure legally...

What are you experienced renting by the room? - Househack

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