IT Director/Service Manager · Lubbock, TX · Member since 2015 · 87 posts · 24 votes
Howdy
I live in Lubbock and the city ordinance states no more than two unrelated people can occupy a house together. I believe most college towns have similar ordinances. I hear people all the time say you can get better rents because 3 college students can occupy a house and will pay more because it is split three ways. I know it happens here all the time but how can you actually put 3 people on the lease if it violates city code? Is it the landlords problem or is it the renters problem? I know it probably isn't enforced unless there is a complaint. But what if you had three renters and someone complained because of noise or other disturbances (These are college kids after all)? It just seems like a mess to me.
Investor · Burlington, VT · Member since 2016 · 110 posts · 59 votes
10y
we have something similar in vermont ( 4 people ) , but they also have a clause for " non- functional family " . what is a family ? its not really definable ! we basically are all over them if we hear about a noise complaint , and tell them if we get a call at 2:00am ( we never do ) we will be calling all their parents as well , so they can be awakened as well :) we make them sign an adendum that says they are a " family " they all eat , shop, share bills, .... together as a family .
IT Director/Service Manager · Lubbock, TX · Member since 2015 · 87 posts · 24 votes
10y
This is what it says
In the definition section of the Code of Ordinances, the definition of family is as follows: “One or more persons related by blood, adoption, or marriage, or not more than two (2) unrelated persons living and cooking together as a single housekeeping unit.”
San Antonio, TX · Member since 2015 · 21 posts · 6 votes
10y
I work for a property management company in Lubbock. We rented a house to 4 unrelated college students, they partied, and neighbors complained. The city gave them one warning, they did not heed it, on the second warning, the city must kick them out and they did. We had to let them out of their lease. In this case, you obviously cannot sue them for non payment of rent. Yes, technically the lease violates the city code, but we have many units with 3 and 4 unrelated people with no problems. We use the TREC lease.
You've cited the rule and it is real. I don't know the penalty for violating it. It sounds like, based on what @Alfonso Aceves said, that you could lose a lease. So maybe it is worth risking?
A guy in Lubbock protested this rule a few years back by painting his house purple:
You've cited the rule and it is real. I don't know the penalty for violating it. It sounds like, based on what @Alfonso Aceves said, that you could lose a lease. So maybe it is worth risking?
A guy in Lubbock protested this rule a few years back by painting his house purple:
Real Estate Investor · Lubbock, TX · Member since 2012 · 80 posts · 17 votes
10y
Hope to see all you guys tomorrow. Remember its from 6 to 9 pm at the Arbor Hotel 6401 62nd St. just off Milwaukee behind stripes (Not Harrigans) this time. Come early to get signed end and network! @Austin Hughes@Jonathan Towell@Robert Bleisch@Alfonso Aceves@Michael Fortier and anyone else thats in the Lubbock, Amarillo, Midland, or Odessa area tomorrow evening. Bring a buddy :)
I live in Lubbock and the city ordinance states no more than two unrelated people can occupy a house together. I believe most college towns have similar ordinances. I hear people all the time say you can get better rents because 3 college students can occupy a house and will pay more because it is split three ways. I know it happens here all the time but how can you actually put 3 people on the lease if it violates city code? Is it the landlords problem or is it the renters problem? I know it probably isn't enforced unless there is a complaint. But what if you had three renters and someone complained because of noise or other disturbances (These are college kids after all)? It just seems like a mess to me.
Michael
One of our craziest rentals was a frat house in Rock Hill SC. Winthrop a smaller college here. We lease to a fraternity who had 9 people in the house. 5 bed 5 bath Older home.
It was actually one of better rentals until they moved out. Needless to say we still own and rent to college kids just much more selective who we put in.
Right now we have bunch of ladies and they also split the rent. It could be a headache but control is everything when owning rental properties.
I used a property management company but found a property like this was better suited for me to run my self.
Investor · New York City, NY · Member since 2014 · 289 posts · 374 votes
10y
Our town limit is 5 unrelated people living together. There are several landlords who have 8 or 10 in one house. Not worth the risk to me. I want to keep my neighbors and the town as happy as possible so I can keep operating.
The college town we operate in allows for 3 un-related, however our property easily sleeps five. We advertise it as the number of bedrooms most of the time that brings 4-5 students to the showings. We're just up front with the students and tell them that we can only allow 3 people on the lease and ask which three will sign. We also have them sign an amendment stating they are the only 3 living in the property.
We wrap it all up by saying as long as you guys pay on time and we don't get complaints we don't police who is staying over at the property (wink, wink). Another step we take to protect ourselves is we only accept checks from the 3 on the lease. We've had the #4, #5 student who is staying there try to pay us and we mail the check right back.
We think its a good solution. Puts the risk on the students.
Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
10y
@Michael Fortier Its a challenge in every college market. My good friend has a few houses and he puts 6 kids in due to the number of bedrooms, although the town only allows 4. When he has inspections he has to have the tenants move all stuff out of 2 rooms to ensure he doesn't get hit on it by the fire marshal. Needless to say he is breaking the rules and he knows it. Ultimately the biggest fear is liability. If something terrible happened, particularly in the case of a fire, you could be in serious trouble. Because you violated the laws your coverage may not have your back. @Sam Erickson Yes there are ways to cover your tracks, but I would consult with a lawyer to ensure this is adequate in the case of a lawsuit.
Personally, I am not comfortable with having the stress in my life that in an instance another persons stupid mistake could result in the loss of my entire portfolio and potentially jail time if your courts hit the landlord hard enough. Again, talk with a lawyer to understand how bad it could get in your state and city. In the college town in Michigan I went to college students have died in the past due to fires so landlords are not given a lot of slack/trust. The limit is 3 in that town.
It is so hard not to buy the big ole house and stuff a bunch of college kids in it and cash flow $900 to $1200 a month right out the gate. My buddy is 26 and has 3 houses like that and makes enough from those properties to live comfortably in our area and only picks up side jobs for extra cash. I know many who do it like this. But, I am looking to build scalable business and the breaking the rules just isn't scalable. Eventually you have a very good chance of getting burned in my eyes.
Flip and Buy/Hold Investor · Rochester Hills, MI · Member since 2013 · 245 posts · 105 votes
10y
I agree with @Joel Florek. It is too much of a risk for me. Why jeopardize the portfolio. I rent in a college town and if you rent or lease to more than what your house is licensed for the city will revoke the license and fine you per day. This property is in a big college town so the city is strict and active on enforcement. Once the license is gone it never comes back and you are screwed. Perhaps in smaller college towns it is not as big a deal and you can get away with it. It all depends on what is at stake.
IT Director/Service Manager · Lubbock, TX · Member since 2015 · 87 posts · 24 votes
10y
@Joel Florek I agree that it probably isn't worth the risk. I was just curious to know what people were doing and if there was a legal way around it. It does seem idiotic to me that you can have a three bedroom house but only rent to two unrelated people though. It's like they want you to violate the law.
Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
10y
@Michael Fortier I agree with you 100%! Its always the few bad apples that ruin it for all the other investors. We have some fantastic Victorians in my hometown that you can pick up for $120k to $150k that could be rented for $400 a month per room and put utilities on the tenants. Put 6 kids in the house and you are off to the races. Find something a little more run down, slap some lipstick on it and you could be in for the same rents with a significantly lower payment. It is so so so tempting because a lot of landlords do it anyway.
Check with your local regulations and have a conversation with a knowledgeable lawyer, you may have a way to get around some of the stringent laws. There are areas in some of the college towns I am familiar with that are grandfathered in as being zoned for more occupants. Investors can pick up houses and put 8 kids in them and they are ok as long as they have fire extinguishers, throw ladders from windows, and other local requirements. However, the houses are very attractive for investors so you rarely find them on the market. But knowing what to look for is key.
Most landlords get through the 4 person rule by cutting up big houses into multiple units. Parking is usually the next issue but given you get the right approvals and zoning this is a great way to cash in on the college market with a big ole house. The nice thing is most college kids don't really care where they live as long as they have a place to warm up food, go to the bathroom/shower, and sleep. Their dinning room is their couch or bed anyways!
Rental Property Investor · Phoenix, AZ · Member since 2015 · 222 posts · 126 votes
10y
This situation actually happened to me when I was in college.
The house was a 2/1, but the landlord said he would put up a wall and create a new bedroom for the three of us, but told us he wasn't supposed to rent to us, because two or more people with a different last name weren't supposed to live in this house (where we went to school in Illinois, neighborhoods had different codes on where student housing could and could not be.)
Turns out the guy who owned the home behind us was the former head of code violations for the city, didn't like our noise one night and called his buddies. A week later, they knock on our door at 6:30 AM, telling us what we violated because they saw the three names on our mail and three different registered cars.
A month later, we had to pay a $250 fine, but that was our rent per person, so the landlord waived our rent that month. Weeks later our lease was up and we all graduated.
So in this case, they fined us and not the landlord.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
I'm sorry, but that's the most idiotic thing I've heard in a long time. So you can have a 3BR rental, but can't rent to 3 unrelated adults who could easily and comfortably live in a 3BR? That's just crazy.
Rental Property Investor · Phoenix, AZ · Member since 2015 · 222 posts · 126 votes
10y
@Fred Heller
I went to a school that had a reputation as a party school. The city tried to protect the permanent residents from the students by passing these codes where students could and could not live off campus, based upon the number of different last names living in the house. This would keep the loud kids away from the otherwise quiet, sleepy community.