Rent by Room-Colorado

[Jonathan Marsh]

Hi all, my wife and I are interested in purchasing a rental property in Aurora (just outside of Denver) and renting out each room individually. We already have rental properties in the area; all of which are rented as single family. Has anyone done this? What are the pros and cons of doing this? I know it will be a lot more work, but we are prepared for that, knowing it can potentially be a lot more money as well. My main concerns are structuring leases to ensure everyone is following rules/regulations in the house, issues that come up between tenants (I don't want to play the mediator) and adhering to housing laws as ideally each room would just have one individual. Any thoughts, insights, etc. would be greatly appreciated.

[Lia Martinez]

I have 3 homes rented by the room, 2 in Denver and one in Aurora near the Stanely Marketplace that I've been running for about 4 years.  Yes, it is more management, but also well worth the increased per sq ft income and the social good of impact investing by creating community, affordable housing, and an environmentally friendly real estate solution. If you don't want to manage it yourself, companies like PadSplit are now coming onto the scene. 

In Aurora, the demographic for this type of renter is generally older single men (40's to 60's). It's a little too far away from the city to be of interest to millennials.  You might be able to target the medical student crowd/traveling nurses depending on your location. 

I recommend having a set of house rules that residents sign when moving in. Common areas are furnished, personal locks on every bedroom, key padded front door, clearly labeled kitchen cabinets and fridge shelf for each resident, etc. Chore chart is helpful. Double kitchens and double washer/dryer is a big bonus.  

I could go on and on. I love talking about these types of investment properties. Please give me a call if you would like to talk in more detail.