June Homes and other Corporate Rental Companies

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June Homes and other Corporate Rental Companies

Matt T.
Somerville, MA · Member since 2016 · 19 posts · 5 votes

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. 

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Justin Rank
Investor · Winhall, VT · Member since 2016 · 106 posts · 44 votes
6y

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.

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  • Justin Rank
    Investor · Winhall, VT · Member since 2016 · 106 posts · 44 votes
    6y

    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.

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  • Matt T.
    OP
    Somerville, MA · Member since 2016 · 19 posts · 5 votes
    6y

    @Justin Rank, So that leads to another question. In Somerville would it be legal for them to rent out each bedroom to four separate individuals in this capacity?  Also, what does ISD stand for?

    That's  a good idea to try to replicate what they are doing myself. I'm just wondering how much marketing I would have to do?  A friend also recommended reaching out to several of the companies doing this.

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  • Matt T.
    OP
    Somerville, MA · Member since 2016 · 19 posts · 5 votes
    6y

    Also - Thanks for the reply @Justin Rank!

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  • Justin Rank
    Investor · Winhall, VT · Member since 2016 · 106 posts · 44 votes
    6y

    I would check with the city, I believe the short term rental laws apply up to 30 or 31 days. ISD is inspectional Services. When the city passed the short term rental regulations, they gave ISD some teeth to be able to enforce short term rentals. 

     I've heard several podcasts that interview businesses that do this exact thing, tell the landlord they are going to be doing corporate rentals or transitional housing and then just go put it up on VRBO and AIRBNB. They don't care if they pay a little more than what the current market rent is. If they cash flow several hundred bucks, and the landlord pays repairs...that's a pretty sweet little business. 

    There are a few folks on here that do AIRBNB from Somerville and I've heard they make 25%-50%+ more than they would just renting out the space to a yearly tenant. I have a multi here in the ville that I live in one unit and rent the others out and I want to pick my tenants/neighbors since I live in the building. That's just me though.

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  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    Downside is definitely the lack of control on the tenants but I see some great pluses, less wear and tear on the units - these are usually just people who sleep in your units, guaranteed rent, higher caliber of tenants, personally guaranteed by the company. 
    Have you considered doing it for a short period of time and going from there? Instead of a multi year lease? See how you like it and reassess from there. 
    Would really like to learn about this process as I have seen this company advertised and want to learn about their business model.  

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  • Christina Z.
    Member since 2018 · 7 posts · 3 votes
    4y

    @Matt T. - Did you decide to go with June Homes? What was your experience?  I'm considering the same and weighing out the Pros/Cons.

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