College SFH rental with my child as one of the tenants

[Stephanie Z.]

Hello all! I've been browsing the forums for a few weeks and learning lots, but I haven't found posts addressing this issue. I'd appreciate any/all input you folks can provide.

We are about to close on a single family home that we're buying for our college-girl daughter to live in along with roommates. The house will be titled to a newly forming LLC and will be treated as an investment property on our taxes, etc.

Our goals are 1) provide safe and reliable housing for our daughter for at least the next 4 years (She's one year into a 5 year sequence.) 2) maximize tax deductions/paper losses 3) in the long run, make some profit and/or reduce the expenses we would have otherwise incurred for housing for our daughter (especially after considering taxes). 

FWIW, we are in a high tax bracket, so deductions/paper losses are quite helpful to us, per our CPA who loved the idea of us buying a property for this purpose. The rental market there seems fairly strong and the university very strong and growing, and we're comfortable with the long term investment potential of this house, even though appreciation isn't critical to this being a good financial move for us. 

It's a 4BR, and our daughter will have one BR. There will be 3 more roommates. We've set the rent at $450/bedroom, so $1350 for the three "other" girls. They'll pay utilities in addition, directly themselves. Unsurprisingly, our daughter won't be paying any rent (now THAT would be silly to pay rent to ourselves, lol).

A lot of what I've read on these forums points out the vital importance of having a great lease, so that's what I'm working on figuring out, so that when we close on the house this month, I can have a lease ready quickly to formalize the tenants/roommates. 

I do plan to have a RE attorney in AL review any lease before using it, but I would like to have an outline of my wishes before taking it to an attorney (especially since the attorney will be new/unknown to me, as college-girl goes to school out of state). In Tuscaloosa, most houses are rented with "typical leases" where all tenants and all parents are each liable for everything. This seems like a great idea for the LL, lol. BUT, I don't want a lease that lists the $1350 as just being the total rent for the three roommates and only lists their names and their parents (without also listing my daughter). . . because I could imagine a far-fetched scenario in which my daughter, if not listed on the lease, could actually be excluded from the house! LOL, I realize this is far-fetched . . . but, I'm always on the lookout for potential legal problems, so I want to avoid that possibility no matter how far fetched.

I'd considered doing 3 individual leases for the other 3 girls, but that seems riskier to me for obvious reasons as well as just being a big PITA, especially considering that I am sure that some roommates will come and go over the years.

So, how DO people set up leases in this circumstance?

Is there a format to set up some sort of "partial house" or "house sharing" lease that would protect our college girl's use of the home while still "bundling" the other girls together into one lease?

Or could I just set the rent at 1350/mo, put ALL four girls on it (including my daughter) and have and additional legally binding roommate agreement (or similar) executed at the same time as the lease that specified 450/mo for each of the OTHER three girls, and 1/4 utilities for each of the 4 girls . . . etc?

I've GOT to be making this more complicated that I need to, lol. Please advise!

We're small business owners, so are reasonably business/finance competent, but other than incidentally renting a home that happens to be on the commercial property we own for our family business, we're relatively novice landlords. 

I'm sure I'll have more questions, but I'll stick with this critical one for now. Thank you so much for sharing your knowledge and any tips you can offer! 

ps. If anyone can tell me how to make my profile picture right side up instead of sideways, I'd be happy to fix it. I've tried re-uploading it after rotating it on my computer, but it always uploads sideways! Sorry about that!