Who has experience doing room rentals? (Not in your primary res.)

Question

I am purchasing a rental property about 1 mile from a university.  Rather than rent to a family...I was thinking of renting it out by the room.   Wondering who out there has done this....

Lauren Ruppert · Answer

We are near Alvernia University in PA.  Dorm rates are high, with no privacy...so I had an idea. The property is less than 1 mile from campus and it has four very large rooms and 2 baths.  We have a niece who rents a room for $700 a month and that place is a dump. So again, I had an idea.  We have 12 doors, but I'm really just a rookie. I come from California (Los Angeles to be exact), so when I saw the prices in PA, I just started gobbling up properties.  Honestly, you can't buy a closet in Los Angeles for what a house costs in some parts of Berks County.  So, I'm just tryin' to live the dream.

Thank you for the Bungalow referral!!

Jonathan Klemm · Answer

Sounds like you are doing big things @Lauren Ruppert!  I am trying to do the same thing here in Chicago!

Super smart of you for taking advantage of the lower-priced real estate in PA, getting started in Los Angeles would be quite a bit more challenging, and grateful I did not need to conquer it.

If you can handle it, seems like rent by the room is the way to go.

Eliott Elias · Answer

You will get more cash flow but more wear and tear. College kids are not the most landlord friendly tenants, I'm sure you can imagine what goes down on the weekends.

Saaj Patel · Answer

Lauren,

This is super popular actually. At Temple University, it is often rented out by the room. I was a student there not too long ago and now have started investing in the area myself. Let me know if you want to discuss this further. I can give you some boots-on-the-ground advice, since I live not too far away currently.

Nicholas Coulter · Answer

@Lauren Ruppert I have done the rent by the room strategy! let me know what questions you may have.

Brennen Thompson · Answer

Rent by the room all day! Your cashflow vs renting out to a single family will be significantly higher. A little more work for you, but in the long run, it'll make you a lot more cash.

At the end of the day you're going to have to do a little cost benefit analysis on what works best for you.

Jonathan Klemm · Answer

Hey @Lauren Ruppert - Just curious, which university you are close to?

I am a little further West in Chicago, but I can tell you plenty of my friends have used the rent-by-the-room model and the cash flow is amazing.  It definitely does take more work just like a short-term rental is more work than a long term rental, but like any business, once the processes & systems are set up everything gets exponentially easier.  Bungalow is a rent-by-the-room website that might be helpful for reference: https://bungalow.com/

My sole advice is to pick a strategy and lean into it 100%.  Too often getting started I wasn't decisive enough.....all the strategies work just pick one and be a rockstar at it!