Shared Top Border
sdcia_head3.jpg (14795 bytes)
SDCIA Message Board
Sign up Latest Topics
 
 
 


Reply
  Author   Comment  
javipa

Avatar / Picture

Senior Member
Registered:
Posts: 3,380
Reply with quote  #1 

I'm finding rents on bread-and-butter houses to be higher than the mortgage payments.

And with those higher rents, I'm considering renting out rooms, rather than houses, to capture more cash-flow and turn what would seem like a lemon deal into lemnade. 

Does anyone have experience with renting out room, instead of houses, that they would be willing to share?

I have never rented out rooms before, but this seems to make a lot of sense, and a way to turn average rentals into 'cash cows.'

For example:    

house-for-rent.jpg

4 Bed 2.5 Bath 2,400 sqft
Market Rent:  $2,500/mo  ($1 a square foot)

Guesstimation:
Furnished common area, includes all utilities and internet:

1)   $1,100/mo Master private bath, shared living area, 1 garage space
2)   $   900/mo 10x12 Bedroom, shared bath, shared living area, 1 garage space
3)   $   750/mo 11x14 Bedroom, shared bath, shared living area, street parking
4)   $   700/mo 11x12 Bedroom, shared bath, shared living area, street parking
=    $3,450/mo  Gross Scheduled Income
less expenses:
    <$  500>/mo Utilities
    <$  250>/mo Management  (10% of Market Rent)
    <$  250>/mo Maintenance  (10% of Market Rent)
=   $2,450/mo  NOI
------------

(Or offer garage area for common storage for all tenants, and offer driveway parking to tenants 1 and 2?)

Tell me this is a terrible idea... 😃



__________________

"Obstacles are those frightful things you see when you take your eyes off your goals." --- Henry Ford "

"149 Ways (Plus One) To Find Motivated Sellers and Get Them To Find You" >>>Click Here To Download 

RobertCampbell

Senior Member
Registered:
Posts: 8,172
Reply with quote  #2 
Hi Jay, hope you are doing terrific!

My suggestion is you try it and see what happens.

Look at it like an experiment.  You can't rely on what you think "makes sense" - you have to rely on what works.

My gut tells me putting four strangers into one rental home will turn out to be more of problem than an economic benefit but who knows.

Maybe you'll figure out how to do it and it will turn out to be a huge success for you.  Anything is possible.  Then you could write a book and put on "how to" seminars and really have some fun!

When I was 48 and just became single, a gal pal talked me into wearing eye-liner to a big formal Christmas dance at the Hotel Del Coronado. 

Crazy idea, right?

Exactly the opposite:  I had more women approach me than ever before.  ***

So as with many/most things in life, you never know unless you give it a try.

Robert Campbell

*** Lesson:  Get out there on the edge guys.  Try new things because you never know what the outcome will be.  Life is too short to let it be BORING. 

::::::

SDCIA presentation on July 9, 2019:

"Where San Diego Housing Prices are Going – and Why"

Click HERE for details.

chatterweb

Avatar / Picture

Senior Member
Registered:
Posts: 332
Reply with quote  #3 
If I were in the position to have a few unoccupied or soon to be unoccupied SFR's I might do it this way:

Tenant pays for utilities. It can be prorated or a set amount but prorated is better. I would have to think about offering free internet it would not be good to have wiFi  If I decided to offer free internet, I would go w a secured network set up in my locked (mostly unoccupied bedroom) To keep the tenants guessing my whereabouts and on good behavior
Whoever is renting the master bedroom gets the garage so raise their nut accordingly Sir. 😉
Here is San Diego, if you have a granny flat located 1/2 a mile from a bus stop/transit/Light Rail you do not have to provide private parking spaces.  






__________________
Dogs have owners. Cats have staff.
javipa

Avatar / Picture

Senior Member
Registered:
Posts: 3,380
Reply with quote  #4 
Thanks Robert for that feedback and advice.  I think you'd look good in eyeliner!   Ha!

I'm not going to be living in the house ...just managing the people ...and the house.  I'm probably, too old, and too selfish, and rigid, for room mates.  So, it has to work without me living onsite.

--------------------------------
Chatterweb,

*** I have attempted to prorate utilities before, and I've lost every single time.  Perhaps I didn't systematize it well enough, but there was always the 'one' person who claimed they didn't use any utilities and complained about having to share something they never used.  This is especially problematic on a move-out.

Otherwise, annualizing the expenses and then hiding the bill in the rent eliminates most of the related crying and belly-aching.  However, it creates an incentive to waste resources when it all seems 'free.'

*** I think I've got the wifi figured out.  Offering a Hot Spot connection with separate accounts (connections/devices) is a way to maintain privacy between users.  Since I'm not using the service myself, my privacy isn't an issue.  Unless I've got a knucklehead with a signal scanner, who's into spying on his room mates.  I think that would qualify as an anecdotal occurrence. 

Of course, anyone concerned about their privacy, probably isn't going to rent a room with a bunch of strangers in the first place.  Never mind each room has its own lock and key.


*** Bus stops can't be a deal-breaker for anyone I rent to.  They must have a car and drive.  And since there's no law about parking spaces where I am thinking of investing, the only issue is offering a likely parking spot, either in front of the house, or in the driveway, and the ones paying the most get dibs on the driveway.  The rest can play bumper cars in front of the house.

*** The issue I'm most concerned about is renting to mix of men and women, or worse, to an unmarried couple sharing one room.  This seems like a self-inflicting wound.  And renting only to men, seems equally unwise.  So, it would seem that I would rent exclusively to women.  And I don't know how to advertise 'women only need apply' without ending up landlording from prison.

Thanks again for your feedback Robert and Chatterbox...

__________________

"Obstacles are those frightful things you see when you take your eyes off your goals." --- Henry Ford "

"149 Ways (Plus One) To Find Motivated Sellers and Get Them To Find You" >>>Click Here To Download 

kdog171717

Senior Member
Registered:
Posts: 104
Reply with quote  #5 
chatterweb,
Do you know if the "1/2 mile from public transit" rule is as a crow flies or on the road?

I have a property in Oceanside that would work, but if it is calculated by how you would walk there it goes over the 1/2 mile by a little bit.
Robertbouffad

Junior Member
Registered:
Posts: 40
Reply with quote  #6 

Hello...

Dear Applicant, I am Mr.Robert Bouffad World Best Loan Offer Company LTD.. We are an international loan firm. It a financial opportunity at your door step We provide Business and personal loans etc. as long as it concerns financial assistance..We are certified, trustworthy, reliable, efficient, fast and dynamic. And a Co-operate Financier For Real Estate And Any Kinds Of Business Financing Apply today and you will get a loan from us..

Apply Now for your very low interest rate of 2% loan!

* We offer loan in EURO AND DOLLAR
* Borrow between 5000USD to 90,000,000.00USD
* Choose between 1 to 30 years to repay.
* Flexible loan terms and conditions.
* It a world of happiness with us bring back those joy of yours by applying for a loan with us today...

All these plans and more, contact us now by email for more info.. ( robertbouffad358@gmail.com )

Email us now: robertbouffad358@gmail.com
skype: Robert Bouffad

Giving your world a meaning.

Regards.

World Best Loan Company Offer..

GeorgeB

Senior Member
Registered:
Posts: 646
Reply with quote  #7 
Hi Jay,

There's a bunch of companies already doing this. It's called shared housing. There's a particular clientele that they cater to that makes it more feasible.

Here is an article on the subject. If you do follow up research from the article, you will find everything you need to know.

https://techcrunch.com/2018/05/19/shared-housing-startups-are-taking-off/
javipa

Avatar / Picture

Senior Member
Registered:
Posts: 3,380
Reply with quote  #8 
Thanks GeorgeB.

I didn't realize the the biggest market was twenty-somethings particularly, in high-end markets.  That makes a lot of sense.

I guess I envisioned a service for middle-aged 'lifers,' instead of the not-yet-married's demographic.

It seems to be most successful at both age extremes; too young to own a house, and too old to take care of one.

Perhaps I can create a hybrid rental for both twenty-somethings 'and' seniors, and call it "Animal/Geritol House"  You know, where everyone parties on the front porch and either smokes pot, or rubs on BenGay.  IDK

😃

Thanks again for that heads up and insightful resource.

     
POT-BENGAY.png


__________________

"Obstacles are those frightful things you see when you take your eyes off your goals." --- Henry Ford "

"149 Ways (Plus One) To Find Motivated Sellers and Get Them To Find You" >>>Click Here To Download 

GeorgeB

Senior Member
Registered:
Posts: 646
Reply with quote  #9 
You're welcome Jay. Glad to help. [smile]
Previous Topic | Next Topic
Print
Reply

Quick Navigation:

Easily create a Forum Website with Website Toolbox.

Policy