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Updated 18 days ago, 11/13/2024
Thoughts on PadSplit
Hello Everyone,
I am positioning myself to purchase a house hack where I will be utilizing the rent by the rent room strategy. I'm really excited might I add. I've seen great reviews on using PadSplit as a way to get onboard and off board tenants as well as collect rent and property manage as a whole among other things. For a fee of course which I believe to be 12% of rent.
I am a new investor but I do have the ability to learn and take action. Am I better of completing these task on my own or is PadSplit the way to go?
I also know that this may be a preference type of question but I would love to hear some thoughts and opinions on this matter.
Wishing everyone who reads this the best and thank you in advance!
- Tax Strategist, Financial Planner and Real Estate Investor
- Atlanta, GA
- 834
- Votes |
- 2,235
- Posts
Be careful with Padsplit.
Padsplit residents can cause problems with neighbors and other residents because many have substance abuse and/or criminal histories.
If your padsplit residents have vehicles that can cause parking issues. If they don't have vehicles your property will have to be near bus lines or Marta.
Also, Padsplit will want you to eliminate any dining room, den, etc to add more bedrooms.
Once you do this conversion it will be difficult to change it back to a traditional long-term rental.
If you decide to sell it after a Padsplit conversion, you can't sell to traditional homebuyers or long-term rental landlords. You can only sell it to landlords using the rent by room strategy. This could lower your resale value.
You might be better off doing it yourself without Padsplit.
Good luck.
- Bill Hampton
- 404-482-3170
I too house hack and learned everything I could ahead of time from BiggerPockets (e.g., bootcamp, forum, books). The BP forum is free and some contributors have nothing to gain and want to see others thrive. The rest is learning by doing. I recommend RentRedi as a PMS. There you will be vetted as a landlord, you can set up each bedroom as a “unit,” you can personalize prequalification questionnaires, and you can choose 2 different levels of background check. Once you move forward with someone you have vetted and feel comfortable with co-living, you can use the message templates to inform your tenant, upload your lease for e-signing, and collect a deposit and rent. The Help Desk responds quickly when you message them.
PS is for a particular type of investing, which are probably the PM, and I wonder if you are permitted to live there. I would not house hack while allowing someone else to place my housemates. You will know best by your vetting and gut with whom you could live. So, to answer your question, you are better off completing being your PM if you will house hack?
#3 House Hacking Contributor
- Real Estate Agent
- Los Angeles, CA
I always recommend starting out yourself. The challenge is if you don't have the personal experience, it can be easy for any property manager to take advantage of you. I've called out PMs in the past and that's only because I knew what they were doing wrong because of personal experience.
@Tar-U-Way Bright I'm in agreement with everyone else here...House Hack! It's the way to go especially as a novice investor. There are a few options if you feel uncomfy and don’t want to rent out rooms in your main space. You can check out homes with a basement that has its own entry. You can get that duplex vibe without the duplex price tag. As for PadSplit, it’s definitely an option, but if you’re gonna live there yourself and don't mind a little hands-on management you can save and still cash flow. There are budget-friendly self-management sites that make setting up applications and collecting rent simple and again, you can pocket that 12%. In short, go it alone. Good luck!
Many have substance abuse and/or criminal histories is absolutely false. The OVERWHELMING MAJORITY are folks who you brush shoulders with on the way or maybe even at work. Think the CNA at your local hospital or your kids pre-school teacher. Please stop spreading this false narrative that someone who rents a room to afford living is a junkie or a criminal. Simply not true. We invite into one to see for yourself. Oh! We have team members that have lived PadSplits before buying a house to do househacking, exactly what you're talking about. One was making an extra $600/month while covering all of his household expenses with just 3 PadMates.
You do not need to remove or even re-configure your property to list it on PadSplit. You can list it as is. You as the host take the risk in loss income by not adding extra rooms. Some hosts are ok with just value appreciation and don't mind thin margins.
Conversion is not as difficult as you might think. Make sure you and your contractor get the right permits but all you have to do is add temporarily walls to where you want to section off. Hosts have done this for less than $3k/room. Also, taking them down is also easy and costs about $1K/room.
Resale/Appraisal value of PadSplits are in line with tradtional real estate. You may see a difference if you're selling to an investor that would price it as an income producing property.
Quote from @Bill Hampton:
Be careful with Padsplit.
Padsplit residents can cause problems with neighbors and other residents because many have substance abuse and/or criminal histories.
If your padsplit residents have vehicles that can cause parking issues. If they don't have vehicles your property will have to be near bus lines or Marta.
You do not need to remove or even re-configure your property to list it on PadSplit. You can list it as is. You as the host take the risk in loss income by not adding extra rooms. Some hosts are ok with just value appreciation and don't mind thin margins. Also, Padsplit will want you to eliminate any dining room, den, etc to add more bedrooms.
Once you do this conversion it will be difficult to change it back to a traditional long-term rental.
If you decide to sell it after a Padsplit conversion, you can't sell to traditional homebuyers or long-term rental landlords. You can only sell it to landlords using the rent by room strategy. This could lower your resale value.
You might be better off doing it yourself without Padsplit.
Good luck.
PadSplit's fee is actually 8% + the first 10-days. So, if you give your members a great move-in experience and they stay for a while, you'll earn more than the 12% fee structure. The move-in experience is so crucial so please do not skimp out on that.
Quote from @Lateefah Mathews:
@Tar-U-Way Bright I'm in agreement with everyone else here...House Hack! It's the way to go especially as a novice investor. There are a few options if you feel uncomfy and don’t want to rent out rooms in your main space. You can check out homes with a basement that has its own entry. You can get that duplex vibe without the duplex price tag. As for PadSplit, it’s definitely an option, but if you’re gonna live there yourself and don't mind a little hands-on management you can save and still cash flow. There are budget-friendly self-management sites that make setting up applications and collecting rent simple and again, you can pocket that 12%. In short, go it alone. Good luck!
You can do this on your own but having help with PadSplit's software will take your game to the next level. When you're ready to scale and build this as an actual business you will need assistance in all areas and PadSplit takes alot of tasks off your plate so you can focus on the growth part of your business.
Quote from @Shannon Strickland:
I too house hack and learned everything I could ahead of time from BiggerPockets (e.g., bootcamp, forum, books). The BP forum is free and some contributors have nothing to gain and want to see others thrive. The rest is learning by doing. I recommend RentRedi as a PMS. There you will be vetted as a landlord, you can set up each bedroom as a “unit,” you can personalize prequalification questionnaires, and you can choose 2 different levels of background check. Once you move forward with someone you have vetted and feel comfortable with co-living, you can use the message templates to inform your tenant, upload your lease for e-signing, and collect a deposit and rent. The Help Desk responds quickly when you message them.
PS is for a particular type of investing, which are probably the PM, and I wonder if you are permitted to live there. I would not house hack while allowing someone else to place my housemates. You will know best by your vetting and gut with whom you could live. So, to answer your question, you are better off completing being your PM if you will house hack?
- Tax Strategist, Financial Planner and Real Estate Investor
- Atlanta, GA
- 834
- Votes |
- 2,235
- Posts
Google Padsplit and Better Business Bureau or Padsplit reviews and see for yourself.
- Bill Hampton
- 404-482-3170
Quote from @Jean Brune:
You can do this on your own but having help with PadSplit's software will take your game to the next level. When you're ready to scale and build this as an actual business you will need assistance in all areas and PadSplit takes alot of tasks off your plate so you can focus on the growth part of your business.
Quote from @Shannon Strickland:
I too house hack and learned everything I could ahead of time from BiggerPockets (e.g., bootcamp, forum, books). The BP forum is free and some contributors have nothing to gain and want to see others thrive. The rest is learning by doing. I recommend RentRedi as a PMS. There you will be vetted as a landlord, you can set up each bedroom as a “unit,” you can personalize prequalification questionnaires, and you can choose 2 different levels of background check. Once you move forward with someone you have vetted and feel comfortable with co-living, you can use the message templates to inform your tenant, upload your lease for e-signing, and collect a deposit and rent. The Help Desk responds quickly when you message them.
PS is for a particular type of investing, which are probably the PM, and I wonder if you are permitted to live there. I would not house hack while allowing someone else to place my housemates. You will know best by your vetting and gut with whom you could live. So, to answer your question, you are better off completing being your PM if you will house hack?
I'm glad to hear testimony for the strategy finally. Thanks for sharing.
I’ve got 3 houses I rent by the room. The cash flow is pretty good. I started off profiting $1500/month as soon as I bought the houses (all within 2 or 3 years ago) vs only $300/month with normal rentals that rent to a family. Mine are in the Fort Worth area. There’s a big demand for rooms to rent in this economy. Lots of folks needing a cheap place to live!
Quote from @Bill Hampton:
Google Padsplit and Better Business Bureau or Padsplit reviews and see for yourself.
Go here and ask the operators yourself: https://www.facebook.com/groups/officialpadsplithostcommunit...
Quote from @Shannon Strickland:
I too house hack and learned everything I could ahead of time from BiggerPockets (e.g., bootcamp, forum, books). The BP forum is free and some contributors have nothing to gain and want to see others thrive. The rest is learning by doing. I recommend RentRedi as a PMS. There you will be vetted as a landlord, you can set up each bedroom as a “unit,” you can personalize prequalification questionnaires, and you can choose 2 different levels of background check. Once you move forward with someone you have vetted and feel comfortable with co-living, you can use the message templates to inform your tenant, upload your lease for e-signing, and collect a deposit and rent. The Help Desk responds quickly when you message them.
PS is for a particular type of investing, which are probably the PM, and I wonder if you are permitted to live there. I would not house hack while allowing someone else to place my housemates. You will know best by your vetting and gut with whom you could live. So, to answer your question, you are better off completing being your PM if you will house hack?
Thank you for this. I do agree with you. Since I am House Hacking I much rather choose who I decide to live with! Thank you for taking the time to respond.
Quote from @Bill Hampton:
Be careful with Padsplit.
Padsplit residents can cause problems with neighbors and other residents because many have substance abuse and/or criminal histories.
If your padsplit residents have vehicles that can cause parking issues. If they don't have vehicles your property will have to be near bus lines or Marta.
Also, Padsplit will want you to eliminate any dining room, den, etc to add more bedrooms.
Once you do this conversion it will be difficult to change it back to a traditional long-term rental.
If you decide to sell it after a Padsplit conversion, you can't sell to traditional homebuyers or long-term rental landlords. You can only sell it to landlords using the rent by room strategy. This could lower your resale value.
You might be better off doing it yourself without Padsplit.
Good luck.
Thank you for taking the time to respond to me. I will definitely take a deeper look into the reviews. As of right to I am leaning towards self management. Thank you for your insight.
Understood. As the host, you have the final say on who moves into the house. You can text/email/call or even see them before allowing them to move in. By the time their information gets to you from PadSplit, they've already had their background checked, income and employment verified, and their eviction history has been checked. You don't need to set up any other communication system (like google voice or another email address) to avoid sharing your personal contact information, you can do all of that within the app. You also don't have to chase anyone down for rent or have awkward conversations with your PadMates if they fall behind because that is done by the support team. It also gives the people you stay with reporting to the credit bureaus when they make their payment on time as a perk.
Quote from @Tar-U-Way Bright:
Quote from @Shannon Strickland:
I too house hack and learned everything I could ahead of time from BiggerPockets (e.g., bootcamp, forum, books). The BP forum is free and some contributors have nothing to gain and want to see others thrive. The rest is learning by doing. I recommend RentRedi as a PMS. There you will be vetted as a landlord, you can set up each bedroom as a “unit,” you can personalize prequalification questionnaires, and you can choose 2 different levels of background check. Once you move forward with someone you have vetted and feel comfortable with co-living, you can use the message templates to inform your tenant, upload your lease for e-signing, and collect a deposit and rent. The Help Desk responds quickly when you message them.
PS is for a particular type of investing, which are probably the PM, and I wonder if you are permitted to live there. I would not house hack while allowing someone else to place my housemates. You will know best by your vetting and gut with whom you could live. So, to answer your question, you are better off completing being your PM if you will house hack?
Thank you for this. I do agree with you. Since I am House Hacking I much rather choose who I decide to live with! Thank you for taking the time to respond.