Genius Rental Strategy or Disaster Waiting To Happen?

[Christian Baker]

Good Morning everyone,

I have a question about my situation that I'd love to get some feedback on from some more experienced investors.

Some backstory: I am adjusting to a recent move to a one person salary. I wasn't getting the income that I needed and I have two spare bedrooms in my house that I never use. My mortgage is $900 and I rented one room out for $550 then the other at $500. I noticed piecing out my house brought significantly more income. I had flipped another house but it just will not sell. The payments are about $675 on this 3bedroom/2bathhroom house. I rented 2 rooms to a lady for $750 and have the opportunity to rent the other for $500. This brings in much more cash flow then renting as a whole. Obviously there is more management on my part and more wear and tear, but is this a smart move? or a disaster?

to wrap things up.

My house:

mortgage $900

rental income: $1050 plus I live in the master suite for free

Property 2:

mortgage $700

rental income: potentially $1250. ($900 if I do not piece it out)

[Natalie Schanne]

Christian Baker - Good job being resourceful!
I piece out a 5 br 3 ba and it works really well. (Rents are 30-50% above normal).

Long term - it's almost impossible to properly charge the right person for damage to the common areas. When I held everyone jointly and severally liable for not reporting a significant water leak under the kitchen sink, they caused a stink but ultimately paid a portion.

You'll also have tenants moving out when others stay, so you're trying to decide whether to take from one security deposit now and one later for common area damage.

Charging against the sec dep for room damage is clear and obvious - like repainting and recarpeting that one room.

You lose some 'economies of scale' when you do 1 room repairs at a time because the other portion of the house is still occupied.