June Homes and other Corporate Rental Companies

[Matt T.]

Hi All! - I had interest from a company called June Homes in leasing our Somerville, MA 4 bed, and then subleasing it out to people relocating to the Boston area. I believe they rent each bedroom separately.  They would pay over market rent, though only a few hundred dollars, over a multi-year contract, and charge what looks like 12-1500 over market for each bedroom. Nice business model!  I am looking for others experience working with this particular company or others like it. What is the downside? I see it as a good opportunity, but I am concerned about them not taking great care of the property and not properly vetting people who would stay in our home. We will live on the first floor beneath them.  Also, they are venture backed, and not an established company. What happens if/when they get beat out by a competitor, and lose funding? We have an airbnb and though we occasionally run into less than ideal guests, at least we have 100% control over who comes and goes. 

[Justin Rank]

I haven't heard of this company, but the strategy is becoming popular of leasing a property and then subleasing it. The sub gets a good portion of the benefit without having shell out the Somerville purchase price. If something big needs a repair, the landlord is still on the hook. My CPA actually recommended the strategy as he has a bunch of clients across the country doing it. I would take a hard look at the contract, Somerville is becoming super restrictive on short-term leasing and I believe as of the 1st can now enforce it with ISD. My suspicion is if crap hits the fan and ISD got involved, you will be on the hook. You could replicate what they do and pick the people you live next door to.