General Landlording & Rental Properties
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Updated over 8 years ago,
Renting by the room SFH (Experiences and tips?)
I'm looking at this property at commerce city, colorado. The home is in like c-class neighborhood, not much good schools nearby, more industrial area.
Doing the math I figured with a 4 bd home I could rent out each room for about $500, $600 for the master bd, is $2100 gross rent minus the holding costs of utilities, mortgage, cap ex, etc, (1700) = $400 net cash flow (calculating if I didn't live in it, if I did I would be paying out of pocket $100/month to live with 3 other people).
Renting the entire home to just one family would probably just make me break even or possibly lose money, which wouldn't be worth the investment of my money and time. I don't think the home would appreciate much in this area but I guess you never know.
I'm concerned about renting by the room, particularly about vacancy and dealing with troublesome tenants. I know it comes down to screening but if the home isn't in a favorable location, how hard would it be to market to decent tenants?
I mean when I visited the city and the area, I didn't feel like it was a warzone or anything, but you could tell just the house quality is just much different than other more remodeled homes and cities. The area and houses around just looks more run down and cheap. I'm assuming that there are just hard working blue collar workers living in the area that have cheap housing and maybe I should market towards that group?
I'm thinking worst case scenario, I don't rent it out to anyone, my holding costs go down to around $1200-$1300 if I don't save for any repairs/cap ex and utilties much lower, and then each tenant I put in would just make it much cheaper for me to live for free! And the best case scenario, I get decent tenants that all get along fine and pay rent on time and I net $400 a month! This is the goal, but of course we have to be conservative! Thoughts anyone?