What are the numbers you look for renting by rooms

[Jacob Anderson]

Hello Bigger Pockets,

I’m a new member and I have a question in regards to renting out your rooms individually. I’m curious what are the numbers and areas you look at to get the most cash flow. Specifically I want to know if areas near college campuses, urban cities, or suburbs have that much of a difference in traffic for renting by rooms.

Thanks,

Jacob

[Victor Menasce]

It depends on each college campus. Get to know the local market for a specific university. For example, near Temple University in Philadelphia, you're looking at about $450-$600 per bedroom. It used to be higher, but the university built their own residence with 1,200 beds which created an over-supply of student housing. Some universities are growing and others are shrinking. You want to assess the supply / demand balance in the local market. Some student housing offers a lot in the way of amenities. For example, there are a number of new projects in Arlington Texas, close to the UT campus that offer swimming pools, fitness, etc. This is despite the fact that students have access to excellent facilities on campus only 4 blocks away. Many of these rooms rent for about $700 per bedroom. But note that most cities will reclassify your place as a rooming house (that's bad) if you put separate locks on bedroom doors and sign a separate lease per bedroom. They want to see a single lease for each apartment. You generally want a single lease with multiple tenants, each with joint and several responsibility for the lease. So if one person on the lease defaults, they are all still responsible. We also get tenants to include parental guarantees for the lease.