Odd Property

[Mike Baker]

We are looking at a property near the campus in our town. It is different in the fact it operates more like a long term hostel, so because its so different then anythinig around it, it has been on the market almost 2 years (which is unheard of here).
It shows a cashflow of $1000-$1500 a month.
It was built in 1948, and the current owner appears to have kept it up, but is just tired of it since he lives 1 1/2 hrs away (one way).
It is a 10 bedroom, with 2 shared kitchens and a common room.
Realtor thinks he would take $280000, and may owner finance.
I am interested in this one, but wanted some feedback.
Thanks,
Mike

[David Krulac]

And a rooming house is a more active intense business and not as much like a passive apt investment. It will require more work not only renting up, but also maintenance and referring between tenants. And if your clientele are college students think "Animal House" and perhaps you should rent the movie.

Comparing apples to apples you should comp a rooming house with other rooming house and not apts.

And you should also check zoning to make sure that it is a permitted use. There was a place here that built as a shared place with 6-8 bedrooms and one LR & kitchen. It was in a neighborhood of SFH and the neighbors complained and turns out it was not a permitted use in that zone. Also some zoning define a family unit as no more than 3 unrelated people and have shut down places that exceed those limits.