Frat House/Private Dorm/Boarding House

[David Shapiro]

I’m looking for somebody that has experience renting a house of 10+ bedrooms on 1-year leases (or by semester). Essentially a privately owned dorm or fraternity/sorority house. I prefer to write my leases by the house so that if one of the tenants decides to bail, the others are still obligated to pay the full rent. With 10+ tenants I imagine the leases are usually written by the bedroom, but I'm open to hearing otherwise and how you've managed the logistics.

I currently own a four bedroom house that is a student rental. It at times has been rented to a frat. I’m not looking for warnings of renting to students, I’ve dealt with the damage and have filled a dumpster with their trash. I’m curious to hear about your experience with this specific setup… the potential pitfalls of renting a larger house by the bedroom, strategies to minimize damage and efficiently manage the property. Anybody that has a relationship or agreement with a Fraternity or Sorority Chapter and how that works.

I look forward to hearing your thoughts.

[Roy N.]

@Colleen F. Thanks for the mention.

We have many student rentals, including apartments, houses (rented as an entire house) and our "international student house" which is a 9-room house rented by the room.

While I have experience renting to students - by the house or by the room - I cannot offer any insight into dealing with fraternities and sororities as they do not exist at most Canadian universities and at none of the ones where we have properties.

Personally, I would not rent one of our properties to a fraternity/sorority ... even if it existed as a legal entity (by charter or a corporation).   We draft a single lease directly with the tenants who will occupy the apartment or house - all tenants named on the lease are jointly and severally responsible for the tenant obligations of the lease.  

In the case of our rooming house, we have a separate lease with each roomer.   We also have someone who lives at the house (the Den Mother) as the point person to ensure everyone respects the property and one another.   

The rooming house is our first such property and has brought with it a whole set of new learning.  When we acquired this house, the intention was to complete its separation into an over/under duplex and rent out 2 4-bedroom apartments, after the existing tenants moved out.  As our first year moved along, we grew to appreciate that the house was much easier to keep full (or near full) than we anticipated and it was making solid revenue, so we left it as is.   Now as we enter our third year with the house, we are looking at two prospective properties to become our second {International} student house as we are consistently over-subscribed at the existing house.

The potential pitfalls with renting a large (10-bedroom) house by the room:

1) Zoning may not allow for a rooming house;

2) No-one looks after the common areas - we started out with the tenants cleaning the common areas which worked fine the first year (we had the right mix of tenants) but did not work well this year ... ironically, the biggest problems were the two Canadian students in the house who did not pull their own weight.   For the upcoming 2015/2016 academic year, we have raised rents by $10/month and hired a service to come in once per week to clean the common areas.

3) When you rent by the room, you have a relationship with each of the tenants/roomers, but there may not exist any rapport, let alone a relationship, between tenants.  As such you will be dealing with more drama and cohabitation issues.   We have found the best way to keep things running smoothly is to have a designated "Den Mother" in the house - in our case, my sister-n-law.

4) You will be carrying all the utilities; as such, it is in your best interest to invest in programmable thermostats (with a lock-out limits on max and min temperature settings); low-flow fixtures and LED lighting.  Even with all that, we occasionally have to remind the Brazilians that it is not normal to wander around the house in shorts and T-shirts in January and we would appreciated it if they donned a sweater rather than continually bumping the thermostat temporary override to 25C.

Another suggestion when renting by the room is to rent furnished rooms - this drastically mitigates damages from the frequent moving in/out of furniture.