Rent room by room in Las Vegas remotely managing

Rent room by room in Las Vegas remotely managing

Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes

I have a 5b3b brand new built house in Las Vegas gated community is going to close in a few days, 2 hospital campus and a 3 year college near by, (HOA requires 90 days minimum stay) , I am debating what would be a better option;

A:Renting out the whole place as one price $2500 to long term rental , no need to furnish. hands off, but the cash flow is negative $200/month. COC negative 1.5%

Pros: less work , pay one time commission  to put tenant in place, easy for me to remotely manage , less turnover. no need to furnish

Cons: negative cash flow, 200 a month that is $2400 a year.

B: Doing it room by room, to rent it out 5 different people in one house, $900-1100/room, total gross income is $4000-4500, Cash flow will be $1000-1300/month. COC is about 7%

Pros: Cash flow is positive

Cons:

1,Furnish the house cost money and time ,if doesn't work for MTR , I have to un-furnish it to switch back to LTR.

2,It is a big house , not sure if it is easy to put 5 traveling nurses in the house at one time, if not ,then I need to add other different group of people in the house , potential raise problem ? what if tenant fight each other in the house or have room break in and sue the landlord?

I called insurance company when they hear I rent out room by room for different people they don't have policy to cover that. al

So , Since I don't live in Vegas ,So I m managing out of state , I really debating what should I do with this house, any advise is appreciated,  and I need to make decision soon to go which route. 

thank you !

1Reply
104 views

Most Popular Reply

Investor · Curtis, NE · Member since 2019 · 231 posts · 140 votes
3y

I own a 4BR 2 BA house in Tempe I rent out by the room. Utilities are included with the rent. I charge $775/month. I have no problem keeping the rooms rented, BUT my son is in one of the rooms, so I have eyes on the ground. One other thing to note, I pay for a monthly cleaning service. I rent the rooms via Zillow (which posts them on HotPad). Good luck.

See this reply in the discussion

20 Replies

Jump to latestLatest
  • Investor · Curtis, NE · Member since 2019 · 231 posts · 140 votes
    3y

    I own a 4BR 2 BA house in Tempe I rent out by the room. Utilities are included with the rent. I charge $775/month. I have no problem keeping the rooms rented, BUT my son is in one of the rooms, so I have eyes on the ground. One other thing to note, I pay for a monthly cleaning service. I rent the rooms via Zillow (which posts them on HotPad). Good luck.

  • Zeona McIntyrePro Member
    Real Estate Agent · Boulder, CO · Member since 2015 · 285 posts · 226 votes
    3y

    You can also rent by the room mostly unfurnished, just furnishing the kitchen and shared areas. This will keep you cash flow positive and not be as big of a furnishing job or investment. 

  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    3y
    Quote from @Gaby Liu:

    I have a 5b3b brand new built house in Las Vegas gated community is going to close in a few days, 2 hospital campus and a 3 year college near by, (HOA requires 90 days minimum stay) , I am debating what would be a better option;

    A:Renting out the whole place as one price $2500 to long term rental , no need to furnish. hands off, but the cash flow is negative $200/month. COC negative 1.5%

    Pros: less work , pay one time commission  to put tenant in place, easy for me to remotely manage , less turnover. no need to furnish

    Cons: negative cash flow, 200 a month that is $2400 a year.

    B: Doing it room by room, to rent it out 5 different people in one house, $900-1100/room, total gross income is $4000-4500, Cash flow will be $1000-1300/month. COC is about 7%

    Pros: Cash flow is positive

    Cons:

    1,Furnish the house cost money and time ,if doesn't work for MTR , I have to un-furnish it to switch back to LTR.

    2,It is a big house , not sure if it is easy to put 5 traveling nurses in the house at one time, if not ,then I need to add other different group of people in the house , potential raise problem ? what if tenant fight each other in the house or have room break in and sue the landlord?

    I called insurance company when they hear I rent out room by room for different people they don't have policy to cover that. al

    So , Since I don't live in Vegas ,So I m managing out of state , I really debating what should I do with this house, any advise is appreciated,  and I need to make decision soon to go which route. 

    thank you !

    I’m not too sure about your cash flow assumption for renting by the room.  It’s a guess as to vacancy rate, trade off between occupancy level and room rent, property management costs and fees for billing time due to problems between tenants, insurance costs, etc.  you’re correct to be concerned with tenant infighting, damage and lawsuits.  I think it requires a whole lot of hands on management. You might find out that you have a minimum wage job instead of an investment. Btw, why are you purchasing this property?
    Private Mortgage Financing Partners, LLC
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Gaby Liu You should also check with the HOA about how many unrelated occupants they allow.

    If you rent by room, probably better to get PMC instead of DIY.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Drew Sygit:

    @Gaby Liu You should also check with the HOA about how many unrelated occupants they allow.

    If you rent by room, probably better to get PMC instead of DIY.


     HI Drew,

    thanks for your comments, no PMC will take rent by room , they are not doing that. it must self managing.

    I have seen some of my friends do that pretty well but their house has no HOA and live 10 mins away, my challenge is the house has HOA and 4 hours away.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Don Konipol:
    Quote from @Gaby Liu:

    I have a 5b3b brand new built house in Las Vegas gated community is going to close in a few days, 2 hospital campus and a 3 year college near by, (HOA requires 90 days minimum stay) , I am debating what would be a better option;

    A:Renting out the whole place as one price $2500 to long term rental , no need to furnish. hands off, but the cash flow is negative $200/month. COC negative 1.5%

    Pros: less work , pay one time commission  to put tenant in place, easy for me to remotely manage , less turnover. no need to furnish

    Cons: negative cash flow, 200 a month that is $2400 a year.

    B: Doing it room by room, to rent it out 5 different people in one house, $900-1100/room, total gross income is $4000-4500, Cash flow will be $1000-1300/month. COC is about 7%

    Pros: Cash flow is positive

    Cons:

    1,Furnish the house cost money and time ,if doesn't work for MTR , I have to un-furnish it to switch back to LTR.

    2,It is a big house , not sure if it is easy to put 5 traveling nurses in the house at one time, if not ,then I need to add other different group of people in the house , potential raise problem ? what if tenant fight each other in the house or have room break in and sue the landlord?

    I called insurance company when they hear I rent out room by room for different people they don't have policy to cover that. al

    So , Since I don't live in Vegas ,So I m managing out of state , I really debating what should I do with this house, any advise is appreciated,  and I need to make decision soon to go which route. 

    thank you !

    I’m not too sure about your cash flow assumption for renting by the room.  It’s a guess as to vacancy rate, trade off between occupancy level and room rent, property management costs and fees for billing time due to problems between tenants, insurance costs, etc.  you’re correct to be concerned with tenant infighting, damage and lawsuits.  I think it requires a whole lot of hands on management. You might find out that you have a minimum wage job instead of an investment. Btw, why are you purchasing this property?

    the rent by room COC is base on I manage myself and with 100% occupancy rate (which is no way), if add all other cost ,the COC is 4% ,

    I have several friend does this rent by room and manage themselves , not too much work actually , but they live 10 mins away from the house. and I live 200 miles from the house.

    the reason I bought the house was I wanted to buy it as primary and I wanted to move there. but later I changed my mind. it was not investment house in first place. otherwise I wouldn't buy a house has HOA and have so many bedrooms.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Zeona McIntyre:

    You can also rent by the room mostly unfurnished, just furnishing the kitchen and shared areas. This will keep you cash flow positive and not be as big of a furnishing job or investment. 


     Zeona, I was just listening to your podcast in BP yesterday and I loved it. You are awesome, I can't believe you commented on my post!

    I just found out from the HOA that my house is not allowed to be rented by room .So I have no choice but to rent it out as a whole. Sad.

    I bought a bad investment.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Drew Sygit:

    @Gaby Liu You should also check with the HOA about how many unrelated occupants they allow.

    If you rent by room, probably better to get PMC instead of DIY.


    I just found out with HOA , not allowed to rent by room at all. I didn't read the CC&R before.

  • Livermore, CA · Member since 2018 · 38 posts · 24 votes
    3y

    Gaby, don't get down on yourself because you can't rent it out by room. I'm also in CA and also invest in Vegas. I am looking at small multifamily right now but I think SFR over there are still good long term investments. Maybe its negative right now, but you raise rents by a hundred a year and in 3 years you are positive and it will likely have appreciated if you decide you want to get out. Good luck!

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Samuel Toma:

    Gaby, don't get down on yourself because you can't rent it out by room. I'm also in CA and also invest in Vegas. I am looking at small multifamily right now but I think SFR over there are still good long term investments. Maybe its negative right now, but you raise rents by a hundred a year and in 3 years you are positive and it will likely have appreciated if you decide you want to get out. Good luck!


     Hi Samuel ,

    After doing all the analysis , yes, LTR is the only way to go with my house in Vegas. I will just keep it . hopefully appreciate in few years.

    are you looking for Multi in Vegas?

    Gaby

  • Zeona McIntyrePro Member
    Real Estate Agent · Boulder, CO · Member since 2015 · 285 posts · 226 votes
    3y

    You could also furnish it and rent it 90 day min, but with its size and the min 90 days you would have to work hard to build relationships with placement agencies locally. It's doable but I'm not sure how much time you have on your hands. 

  • Livermore, CA · Member since 2018 · 38 posts · 24 votes
    3y
    Quote from @Gaby Liu:
    Quote from @Samuel Toma:

    Gaby, don't get down on yourself because you can't rent it out by room. I'm also in CA and also invest in Vegas. I am looking at small multifamily right now but I think SFR over there are still good long term investments. Maybe its negative right now, but you raise rents by a hundred a year and in 3 years you are positive and it will likely have appreciated if you decide you want to get out. Good luck!


     Hi Samuel ,

    After doing all the analysis , yes, LTR is the only way to go with my house in Vegas. I will just keep it . hopefully appreciate in few years.

    are you looking for Multi in Vegas?

    Gaby


     Yes as long as you can handle the negative cash flow for a couple years I’m sure it will still be a good long term investment. And yes I’m looking at small multi right now but have to be a little picky in some of the Vegas areas as I’m sure you are aware.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Zeona McIntyre:

    You could also furnish it and rent it 90 day min, but with its size and the min 90 days you would have to work hard to build relationships with placement agencies locally. It's doable but I'm not sure how much time you have on your hands. 


     Hi Zeona,

    I agree with you , I feel the house is too big to put 5 people at one time as MTR , in your podcast you mentioned your MTR is 1b1b or 2b1b. I m going to buy your book and learn more knowledge about it.

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    3y

    Don’t forget. If you self-manage I’m pretty sure you have to have a local “agent” in Nevada if you aren’t local. 

  • Zeona McIntyrePro Member
    Real Estate Agent · Boulder, CO · Member since 2015 · 285 posts · 226 votes
    3y

    @Gaby Liu there are packs of traveling nurses that travel together and families that want furnished rentals but it is a big investment in furniture and time to test it out. But if you do and it doesn't work, maybe that will inspire you to arbitrage 3 places and just move the furniture over. Could work. 

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y

    Thank you, Zeona, that is a challenge, and I will think about it. could work, ,could not work, won't find out until I try.

  • New to Real Estate · Washington, D.C. · Member since 2019 · 28 posts · 23 votes
    3y

    Hey Gaby - one thing to consider as well is that when you account for the management/showing aspect, ensure that your PM is willing to deal with a rent by the room situation. I am currently managing a rent by the room property in Washington, D.C. and am having trouble getting a property manager to take it on. One way around this is to have a consistent handyman who can do showings and you can pay them per showing, but I would reach out to a few and see if they are willing to do that. 

  • Las Vegas, NV · Member since 2022 · 2 posts · 0 votes
    3y

    Hello Gaby, are you still having this issue, or figuring out what to do? What zip code is this property in? I live in Las Vegas as well, and have an idea that I think could definitely help!

  • Real Estate Agent · Las Vegas | Los Angeles · Member since 2022 · 19 posts · 6 votes
    3y
    Quote from @Gaby Liu:
    Quote from @Drew Sygit:

    @Gaby Liu You should also check with the HOA about how many unrelated occupants they allow.

    If you rent by room, probably better to get PMC instead of DIY.


    I just found out with HOA , not allowed to rent by room at all. I didn't read the CC&R before.


    Hi Gaby have you considered keeping a room for yourself and rent the rest out? Does HOA still not allow it? I doubt HOA would specifically call out all situations in their CC&R.

  • Investor · Los Angeles · Member since 2019 · 118 posts · 102 votes
    3y
    Quote from @Alice Chen:
    Quote from @Gaby Liu:
    Quote from @Drew Sygit:

    @Gaby Liu You should also check with the HOA about how many unrelated occupants they allow.

    If you rent by room, probably better to get PMC instead of DIY.


    I just found out with HOA , not allowed to rent by room at all. I didn't read the CC&R before.


    Hi Gaby have you considered keeping a room for yourself and rent the rest out? Does HOA still not allow it? I doubt HOA would specifically call out all situations in their CC&R.


     DM me for detail, i have experience it all .lol

Join the conversationCreate a free account to reply, vote on answers and follow this thread.