Mixing LTR and MTR Bedroom Rentals in a 3/2?

Question

Hey everyone,

I'm in a situation where I will be moving from my current 3/2 home to a new state soon and I'm trying to find the most optimal way to rent out the house. I acquired the property before really diving into BP and learning all about the various expenses of renting a property. Needless to say - renting the entire home as a 3/2 doesn't quite break even on the principal, interest, taxes & insurance so I'm forced into the space of renting by the room or shorter leases. While living in the house over the last year I've rented the bedrooms furnished individually (to college students) to offset the mortgage and I have one tenant interested in staying. My question is - can LTR and MTR be mixed inside a house? I know utilities and some details would need to be ironed out but I was hoping I might be able to rent at least the master bedroom to a travelling nurse to get a higher amount on the net rent. Open to thoughts and suggestions, not sure if this is even a remotely good idea but I thought it might be worth looking into.

Note: The property is 1.5 miles from a large university, 1 mile from a Level 1 trauma center, and 3.5 miles from another Level 1 trauma center.

Avree Anderson · Answer

Sorry for the late reply but thank you @Nicole Heasley, @Colleen F., and @Bonnie Low for the input! We opted to continue renting exclusively to students for the next year and consider a pivot to medium term rentals afterwards. It was an interesting idea but could prove to be a little more complicated to manage. Thanks everyone!

Bonnie Low · Answer

@Nicole Heasley it came up on an article I read and also in my research on recommended state-specific lease language. My properties are mostly in CA so it may be one of those things doesn't matter in more landlord-friendly states.

Colleen F. · Answer

@Nicole Heasley  You are right I tagged the wrong person. I don't think there was as big a travel nurse group as there is now years ago. There was a time when the agency provided housing and travel work is getting to be more common and no agency housing, It is good for shared housing because it is usually a better quality tenant.  My son is doing it now and it seems to work for him.

@Avree Anderson  I should have tagged you above but in your case I advise M2M and judge based on your renter.

Nicole Heasley Beitenman · Answer

I think you meant to tag the OP. That being said, I did start my REI career by house hacking an SFH. I wish I had known about MTRs back then. I lived, like, 15 minutes from the Cleveland Clinic. My LTR tenants were all in the medical field. I wouldn't hesitate to house hack a single and operate it as an MTR.

Colleen F. · Answer

@Nicole Heasley  also  I didn't see that you lived with this long term tenant. Ask yourself what are they like to live with? Are they a grad student? Daytime schedule? Clean?  Loud or quiet? I had a similar transition but it was from having a female to male in second room. Some cared, some didn't and that was a shared bathroom which isn't popular with health care workers. Put everyone on month to month in case there are issues.

Colleen F. · Answer

@Avree Anderson it doesn't sound like it makes a great rental. You don't want to just cover costs. You want to put aside for long term repairs and pay yourself.. If you rent by the room it does not work to mix students and travelers. If you are in a popular area for students though sometimes you can get more for a student rental.  As for long and mtr length of stay is not as big an issue as tenant type. Health travelers like to be be with the same type of tenant.  Sharing baths you may have gender issues, or you can have schedule issues. Price out renting 2 rooms see if that does well for you. Also don't forget you have to include utilities when you rent by the room.

Bonnie Low · Answer

Hmmmm....interesting concept. I haven't heard of anyone doing this specifically but then again, I'm not sure it's all that different than the idea of a boarding house or rent-by-room but with tenants having different lengths of leases. So it might actually be possible. One challenge you might face is your mix of prospective tenants not being a good fit for one another. For example, college students and travel nurses may have very, very different manners in which they use your home. Nurses need quiet for sleeping when off shift. College students..not so much.  So you might try to fill it with similar tenants to make the usage more cohesive and keep disagreements at bay. I'd look into some podcasts or books about rent-by-room and boarding houses. I know I've heard a few podcasts about this over time so they're out there. I'd also want to consult an attorney for your leases because your lease terms are typically going to be different for LTR vs MTR. For example: with MTR you don't provide a mailbox in certain states because it infers long term tenancy rights whereas with a LTR, people expect to have regular mail service. How you charge for utilities typically varies between MTR and LTR as well. And for MTR you provide either cleaning services or cleaning supplies, neither of which you provide for LTR usually. So if it were me, I'd want to make sure an attorney drew up the leases to accommodate for the nuances between tenant types and give you maximum protection. The other thing that would vary is your insurance. The way the property is utilized matters to your insurance carrier so check that out as well. It's an interesting thought experiment for sure. I'll be interested to see what others have to say. Good luck to you whatever you decide!

Mixing LTR and MTR Bedroom Rentals in a 3/2?

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