Do you charge extra for additional people in your apartment?

Question

So, we are in looking for new tenants and receiving many calls and interest about our apartment. Our perfect scenario would be family with kids, we are going to rent 2 bedroom and 1 bath 900 square feet for $1,100. Should we charge more if this family, for example, will be living with 2 extra people like sister or cousin? Is $100 for each additional person in the apartment fair?

We are new in renting business and searching people to rent its going to be our new experience. Thank you for advice.

Mike S. · Answer

Federal occupancy rules require you to allow 2 persons per room.  Setting fees that are different based on families set you up for discriminatory liability. Familial status is a protected class under the Fair Housing Act.  There may also be local and state rules to accept more than the federal limit.

Thomas S. · Answer

As @Nathan G.points out you charge more if it costs you more.

It is however always wiser to only select tenants you actually want. When screening you find out who/how many are applying and then, without any discussion with the applicant, decide if you want to accept them or not. If you want only a family with no additional indivulaes you continue screening applicants until you find the most qualified and then  inform all others the property is no longer available. Never allow any applicant to know what you are specifically seeking and you will have far less issues when rejecting. Never inform any applicant why they were rejected and make sure the one you select does afford you the ability to screen out all others. That may be credit score, income level or even bad attitude on the part of those rejected.

When you know and understand the laws and how to properly screen it is possible to legally eliminate any applicant by keeping the true reason too yourself. Know the rules, know the laws and use them to your advantage.

When you operate a business based on fear you are bound to end up with tenants you will end up regretting you approved.

Joe Splitrock · Answer

@Lena S. you need to take into account fair housing laws, which would prohibit you from charging more if they are related. The sister would be a direct relation, but probably not the cousin. I recommend occupancy limits based on HUD guidelines, state and city limits. Do some research and establish rules based on this - every location is different.

For example, my city prohibits more than 3 unrelated adults from sharing a property. So even in the case of houses near the university, it would illegal to have more than 3 unrelated adults. I can limit it to no more than two unrelated adults and fall within HUD guidelines. My no more than two unrelated adults rule, eliminates roommates in my houses. This prevents parties and reduces turn over.

When children are involved, the general HUD occupancy guidelines are number of bedrooms times two, but HUD also says to consider bedroom size and sometimes a plus one rule applies. (plus one could be living room pull out couch or baby in parents room). Some states have laws that even say 2 per bedroom plus 1 maximum, to limit for safety reasons. Too many people in a dwelling is dangerous.

In your case if you followed the 2 per bed plus 1 rule, it would be no more than 5 occupants in the apartment, which would be a lot for 900 square feet! When you say two additional adults, I would be concerned if that was 4 adults and 2+ kids. You may not meet state or local laws.

In my experience, the less people the better. I would put safety and legal requirements ahead of the extra money.

Lena S. · Answer

Thank you for all details.

Joe Splitrock · Answer

HUD does not have a 2 per bedroom rule, although that is the guideline most landlords use. HUD provides some frame work for making the decision, but argues size of rooms and age of occupant make a difference. In some cases one per bedroom or three per bedroom may make more sense. They have also stated that a two per bedroom plus one, with one being a pull out couch in the living room or a baby in a parents room should be allowed.

Of course the rules would be different for unrelated adults. State and local laws apply. Occupancy rules are setup to avoid discrimination and protect safety. Not allowing families with small children to share rooms would be discriminatory. On the flip side, putting too many people in a property can create a safety hazard in case of fire, when people need to escape.

Another factor is egress for escape in fire. You can't have people sleeping in rooms without acceptable size escape window. I have seen landlords advertise a "non-legal" bedroom in the basement in their listing. It is a strange thing to advertise, because if it is not legal, then it isn't a bedroom. If someone dies in a fire in a non-legal bedroom, the landlord faces civil and possibly even criminal actions.

Here is a HUD document that talks about it occupancy:

https://www.hud.gov/sites/documents/DOC_35681.PDF

Jim Adrian · Answer

I would definitely look at the fair housing laws.  @Mike S. is right on discrimination.  I do believe fair housing allows an extra person per living room etc.  but not completely positive on this one.   Your price should get set on market value of house of similar size not by family size.   You also need to see if there is a limit on nonfamily members and what the exact definition is for your area.

Lena S. · Answer

I see. Thank you.

Lena S. · Answer

Where can I learn what is an legal occupancy limit in my area?

Lena S. · Answer

We pay utilities, tenants pay only electric.

Thank you

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