Rent by the room risks

[Joseph Romano]

I've found a single family house that would be perfect to house hack if I rented by the room. Vacancy in my area is about 8%. Since I am renting by the room should I have the vacancy rate be around 12%-15%? 

[Steve K.]

@Joseph Romano yea I would estimate vacancy above average. 15% sounds pretty safe. Even if vacancy is much higher/ worst case scenario financials should be much better for you than renting or paying your mortgage alone without housemates. House hacking is how I got started, and it’s hard to beat for creating seed capital in order to fund more investing. It’s not without its challenges however and higher turnover (often from residents not getting along) is probably the biggest risk, so you’re on the right track by budgeting for higher than average vacancy/increased “churn” (more turnover). Screen well with housemate comparability in mind! Also don’t rent to any paralegals or peyote cult leaders. The two biggest pain in the butt housemates I ever had were a paralegal who thought she was a lawyer and argued over everything, and a hippy dude who was really fun when sober but not as much fun when he had his peyote cult friends over and they busted out the bongos around the bonfire, driving everyone in the neighborhood crazy.