Renting per bedroom in North Jersey SFHs?

Question

Hello BP,

I'm trying to find my first deal to get started and I was wondering if there's anyone having success in North Jersey with renting out per bedroom in single family homes.  It's pretty difficult finding multifamily properties and I was wondering if this was another strategy that others have found successful for them here.  If so, do you have any tips on this strategy or any areas that you tend to stick to?  I figure most people who are willing to deal with roommates are mostly in the young professional demographic who would want to live outside NYC or near places like Hoboken and Morristown.  Appreciate hearing all your ideas, thanks!

Michael Goldsmith · Answer

I personally don't like that model.  There are a few problems that you should consider.  Firstly, if you're putting up a boarding house, it's not going to be in a nice area.  Likewise, people who need to live in boarding houses are people you're going to have problems with.  Many years ago, I was a tenant very briefly in a boarding house in Newark while I was working on my Master's degree.  I lasted 2 months before I said "to hell with this," and moved out to the burbs.  Now, I'm no stranger to rough areas, and that house was filled with college kids, but even then, it was rough, and I was just living there.  I can't imagine  what that landlord had to deal with.

David Chin · Answer

@Brian Liscio With this strategy I wouldn't live in the unit with the tenants, but was just thinking of other possible options.  Or maybe if I'm able to live in one unit of a duplex and rent out per bedroom in the other unit that might be feasible as well for cash flow here.  Appreciate the feedback!

Brian Liscio · Answer

Hi David,

I’m a fan of this model. I know a lot of towns won’t allow a boarding house. A work around can be letting one tenant just sub lease. At the same time learn how to PM. Do you plan on living there? If so, I’d rent rooms...