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Innovative Strategies

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28
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23
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Joseph Ayoub
  • New to Real Estate
  • Washington, D.C.
23
Votes |
28
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Rent by the Room and Occupancy Limits

Joseph Ayoub
  • New to Real Estate
  • Washington, D.C.
Posted Dec 14 2023, 16:56

Hi All - I am wondering if anyone who does rent by the room in the Atlanta metro area has advice on how to do a rent by the room rental? Specifically, how to go about managing unrelated persons living together per county or city ordinance and lease structure. 

I am considering two properties: 

1) A home DeKalb County (Decatur) that is zone R75 for single family zoning. The zoning record says it is in an unincorporated tax district. 

2) A home in Kennesaw that is also zoned for single family.

I see online that there is conflicting info, where in DeKalb county, 3 unrelated people can live together, but Decatur shows 2 unrelated people. Additionally, the house in Kennesaw is close to KSU and currently used as a student rental, but Cobb county shows 2 unrelated people who can live with each other. 

My questions are:

1) How are leases structured? Do you create a separate lease for each individual?

2) Do you need a rental license or any registration with the county/city?

3) Is rent by the room a feasible strategy with these county/city living restrictions?

Thanks for any insight!

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290
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143
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
143
Votes |
290
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
Replied Dec 15 2023, 03:17
Quote from @Joseph Ayoub:

Hi All - I am wondering if anyone who does rent by the room in the Atlanta metro area has advice on how to do a rent by the room rental? Specifically, how to go about managing unrelated persons living together per county or city ordinance and lease structure. 

I am considering two properties: 

1) A home DeKalb County (Decatur) that is zone R75 for single family zoning. The zoning record says it is in an unincorporated tax district. 

2) A home in Kennesaw that is also zoned for single family.

I see online that there is conflicting info, where in DeKalb county, 3 unrelated people can live together, but Decatur shows 2 unrelated people. Additionally, the house in Kennesaw is close to KSU and currently used as a student rental, but Cobb county shows 2 unrelated people who can live with each other. 

My questions are:

1) How are leases structured? Do you create a separate lease for each individual?

2) Do you need a rental license or any registration with the county/city?

3) Is rent by the room a feasible strategy with these county/city living restrictions?

Thanks for any insight!


Realtor here from Kennesaw. In the city limits there is no permit needed for any kind of rentals. In unincorporated Cobb there is a STR permit relatively easy and cheap to obtain. No permit required for long term rentals in un incorporated Cobb. As far as occupancy limits enforcement does happen but it's not super common and every case I've heard of for enforcement is due to neighbors complaints typically noise or too many cars. Right now I'm not seeing homes that are economically viable for long term rent by the room if you follow the Cobb county ordinance. I have a few STRs both in and out side kennesaw city limits and they make financial sense. If you were looking to house hack I would recommend finding something that you could rent the top out as an air bnb (STR) and live in the basement with a completely separate entrance.

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Michael Dumler
  • Real Estate Agent
  • Atlanta, GA
1,632
Votes |
1,511
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Michael Dumler
  • Real Estate Agent
  • Atlanta, GA
Replied Dec 15 2023, 08:00

@Joseph Ayoub, how many unrelated individuals would be living together for both the Kennesaw and Decatur properties? While you are assuming risk with this investment strategy, I would not let the County ordinances scare you. As noted by John, issues arise when neighbors start complaining for various reasons. Needless to say, properly manage your tenants and you'll be fine. I'm house-hacking in Cobb County with three other roommates, I have yet to run into any trouble. 

There are a few property managers in the area who are familiar with leasing/managing rent-by-the-room properties. Being that you are out of state, I would highly recommend that you work with one of them. If you're interested, I'd be more than happy to make intros. Moreover, there are leasing companies such as PadSplit and HomeRoom who implement this daily, but for your property size/scale, I don't believe they'll be necessary. 

I hope this provides some guidance/clarity! 

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Replied May 7 2024, 11:09

@Michael Dumler I would be interested in being connected with these property managers! Am also an out of state investor looking to make this strategy work.

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4
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Replied May 25 2024, 08:14

Hi! I am in the same situation, I'm about to close on a home in Kennesaw that I liked for the idea of, converting it to a duplex and renting out rooms. Turns out, neither of those things are allowed!?! It would be really helpful if anyone could point me to a local real estate agent/lawyer in the City of Kennesaw. My agent is from Atlanta and he doesn't seem to think I will have any trouble renting but I am truly a little nervous at this point.

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15
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Rachel Davis
  • Rental Property Investor
  • Brevard County, FL
15
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9
Posts
Rachel Davis
  • Rental Property Investor
  • Brevard County, FL
Replied May 25 2024, 11:48

At the end of the day, the law is the law. Does this particular law get enforced often? No. 

Is there a risk that it could be enforced? Yes. 

Is it a good idea to base an entire business model around something that breaks the law? No. 

There are many other cities out there who have less restrictive occupancy. I've researched this in many cities and have never even seen one as low as 2-3 unrelated individuals.

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290
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
143
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290
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
Replied May 26 2024, 05:07
Quote from @Carlos Cotera Jurado:

Hi! I am in the same situation, I'm about to close on a home in Kennesaw that I liked for the idea of, converting it to a duplex and renting out rooms. Turns out, neither of those things are allowed!?! It would be really helpful if anyone could point me to a local real estate agent/lawyer in the City of Kennesaw. My agent is from Atlanta and he doesn't seem to think I will have any trouble renting but I am truly a little nervous at this point.

 Kennesaw also has an ordnance that requires heads of house hold to own a firearm. But much like the relationships of the people living in a house hold this is very difficult to enforce across the board but the law is technically the law. 

Sec. 34-21. - Heads of households to maintain firearms.

If you buy a 6 bedroom house in a neighborhood with a small driveway and try to cram 6 couples in the house each with a car you will probably have issues. 

If you have 4 college students in a 5 bedroom house with a reasonable driveway that can fit 4 cars and they don’t throw parties all the time you will probably be ok. But technically you would be out of compliance with an ordinance I think may cross the lines of housing discrimination.

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Replied May 26 2024, 09:26

Thank you guys for the comments! Luckily I made sure this house hack still made sense to me in the worst of scenarios where I could only house myself. I really appreciate your opinions. Now my question is: if my current driveway only fits 2 cars, would you guys preferp street arking or building a new driveway?

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290
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
143
Votes |
290
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John Powell
Pro Member
  • Real Estate Agent
  • Kennesaw, GA
Replied May 26 2024, 10:50
Quote from @Carlos Cotera Jurado:

Thank you guys for the comments! Luckily I made sure this house hack still made sense to me in the worst of scenarios where I could only house myself. I really appreciate your opinions. Now my question is: if my current driveway only fits 2 cars, would you guys preferp street arking or building a new driveway?

 New driveway or extension to a driveway is always better in the Kennesaw area  reach out if you need a guy we did a few last year the extensions are around 5-6k 

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4
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Replied May 29 2024, 08:39
Quote from @John Powell:
Quote from @Carlos Cotera Jurado:

Thank you guys for the comments! Luckily I made sure this house hack still made sense to me in the worst of scenarios where I could only house myself. I really appreciate your opinions. Now my question is: if my current driveway only fits 2 cars, would you guys preferp street arking or building a new driveway?

 New driveway or extension to a driveway is always better in the Kennesaw area  reach out if you need a guy we did a few last year the extensions are around 5-6k 


 Thanks for the info, John! I sent you a bigger pockets DM. Also, do I need a permit from the city for this kind of work? Especially since it would be facing the road.