Buy and hold coliving exit strategy

[Dennis Minary]

Good morning! I am looking into to the Columbus ,GA market and middle GA. Looking to purchase a single family house under $200K. Buy and hold coliving exit strategy. Any investors or agents in the know regarding this exit strategy?

[Ebonie Beaco]

I’ve seen more investors start looking at coliving over the last few years, mainly because renting by the room can sometimes create more cash flow than renting the property as a single unit. If the demand is there and the numbers work, it can be a solid approach.

One thing I always think about is the exit strategy. Even if your plan is to hold the property long term, it’s good to have options. With a property under $200K, you could continue renting by the room for cash flow, convert it back to a traditional rental, sell it to another investor, or refinance later and pull out equity to buy another property.

From the financing side, one thing to keep in mind is that most lenders will value the property based on what it would rent for as a single unit, not the total of all the room rents. It doesn’t mean the strategy won’t work, it just means lenders may not count the income the same way an investor would.

If the numbers still produce strong cash flow after expenses, it could definitely be worth exploring. I would just make sure the local zoning and rental rules allow room rentals before moving forward.