Moving out of my House Hacking home

[Solen Kebede]

Good Morning Everyone! I have been a huge fan of the BiggerPockets Podcast for years now, but I am just now creating an account on this site. Real glad to be a part of this community!

I am currently house hacking my townhome in Silver Spring, MD and have been doing so for just short of 3 years. I am looking to move as early as November of this year to get a second property closer to Washington DC (~ 1 hour drive).  I live a townhome with five bedrooms and am currently renting out 4 of the rooms (one person per room) and living in the master suite. It is worth noting that 2 of those bedrooms are in the basement which has its own entrance and is an independent unit.  To date I have been self-managing my property and it has been pretty straight forward since I was living there. However, with me moving out I will not be "there" all the time and that is making me wonder how I can manage this property with 5 tenants. 

I would like to continue to self-manage this property, but I am open to a management company. As of now I am looking for any advice on what I should be doing to prepare for this transition and how people have successfully managed room sharing properties. Any advice would be appreciated.  

[Michael K Gallagher]

there are several great episodes of BP from the OG days that speak to this strategy.  There are several apps out there that can help if you are not using them already, one is called padsplit that i've seen.  But in general its a good strategy and one that is really quite smart.  With you not being there you're just going to need to make sure all the things you were doing and managing don't fall by the side.  I'd think if you had a cleaner come in to handle that aspect and then used an app to manage the leases and things you'd be in pretty good shape.  Great way to get started!

[John Steffen]

Hey Solen, I would start by asking yourself what you actually do day to day to "manage" the place currently. Most of the time, even in the RBTR model, it's really not much day to day work. I think you'll find it's easier than you're initially thinking. Like Michael said, I would use a cleaner once a month to clean or biweekly, restock the common area items (like TP, dish soap, etc), and sign up for routine lawn and snow services. The cleaner will be your steady intel on how the place is holding up. Oh, and I would also interview a few local handymen to keep on call in the case something does need a timely repair (at least 2). 

[Jack Seiden]

Quote from @Solen Kebede:

Good Morning Everyone! I have been a huge fan of the BiggerPockets Podcast for years now, but I am just now creating an account on this site. Real glad to be a part of this community!

I am currently house hacking my townhome in Silver Spring, MD and have been doing so for just short of 3 years. I am looking to move as early as November of this year to get a second property closer to Washington DC (~ 1 hour drive).  I live a townhome with five bedrooms and am currently renting out 4 of the rooms (one person per room) and living in the master suite. It is worth noting that 2 of those bedrooms are in the basement which has its own entrance and is an independent unit.  To date I have been self-managing my property and it has been pretty straight forward since I was living there. However, with me moving out I will not be "there" all the time and that is making me wonder how I can manage this property with 5 tenants. 

I would like to continue to self-manage this property, but I am open to a management company. As of now I am looking for any advice on what I should be doing to prepare for this transition and how people have successfully managed room sharing properties. Any advice would be appreciated.  

I’d probably look to rent just in one lease, probably a nice middle ground between having 5 tenants & paying a property manager 

[Wale Lawal]

@Solen Kebede

To manage a house-sharing property effectively, establish clear communication channels with tenants, automate rent collection, create a solid lease agreement, have a local support system, screen tenants thoroughly, use remote management technology, plan for vacancies, consider professional management, and prepare for your move. By following these tips, you can continue self-managing your townhome even after moving out, ensuring a smooth transition and a smooth transition into your new home.

Good luck!

[Gregory Schwartz]

Talk to me about the numbers. it would be less management intensive to just rent it out as 2 separate units and not 5 bedrooms. 

What would you make renting by the bedroom?

What would it cost to hire PM?

What would you make renting it as 2 units (IE not by the bedroom)?

Is it worth renting by the bedroom if you also have the added expense of PM? Or is it better to just rent out the 2 units and manage it yourself? 

Side note: I grew up in and around Columbia, MD. 

[Michael Smythe]

@Solen Kebede 

Do you have a landlord insurance policy on the property?

What will happen to your property taxes if you no longer claim the property as your primary residence?

Are the 2 bedrooms in the basement legal?

Does the local municipality recognize the basement as a separate address?

Have you passed all required local rental inspections?

Most PMC's will charge a lot more than the industry standard 8-10% of collected rents to manage a Boarding House - which is what you have. 

Why?

It can be a nightmare dealing with occupants that don't get along and want the manager to play "cop".

[Joaquin Camarasa]

The key questions here are:

How much you make renting by the room?

How much would you make renting the property as a whole instead of by the room?

Once you have the difference, assuming that both options fully pay the mortgage, consider wether or not all the little tasks you do daily while self managing are worth the extra income.

[Alecia Loveless]

@Solen Kebede Listen to this weeks A Better Life Podcast by Brandon Turner. The guests are a couple who exclusively do co-living properties just like you are describing.

The number one thing I took from it was that you need to implement systems and rules to make it simple. Also that your lease should give you the right to evict in 30 days anyone not abiding by the rules or causing problems.

They have over 400 tenants in their co-living portfolio and have been doing this for years.

Go Listen to it!!