1) I’ve found that you have to be careful when paying for cash. Most of the time it’s fine, but I’ve had tenants slip in a fake $100 bill among the legitimate ones. I avoid having tenants directly put money into my bank account. I charge them a $10 fee AND have them take a picture of their receipt if they do so. Instead I use a free website called Cozy.co which accepts my rent for me, keeps track of ALL of the details and more. For people who need to move in quickly before Cozy can process their payment, I use CashApp.
2) To minimize the cost of turnover and to avoid getting stiffed on the rent you will require all roomers to pay the first week? So you are renting by week? Double check your tenant-landlord laws in your area. Some places consider week by week rents to be “short term” and they require a whole separate/special type of license. This started as a response to all their short term AirB type rentals out there.
Require all roomers to pay the first week, last week and the security deposit upon move-in? Remember your audience. Many roomers may be pretty much living paycheck to paycheck. You can avoid getting stiffed by having good screening processes. Requiring a security deposit is also reasonable, but the first and last weeks rent in addition to that may be too much, especially in compared to other rooming houses you're competing with. If you need that, perhaps you should consider renting as a SFH and not doing the Rooming House thing. Some States and counties don't allow move out or cleaning fees. I'd double check on that just in case.
3) OK. You probably know this already, but I will say it anyway – have leases in their native language as well as any following notices and tenant communications. This will protect you and help make sure your tenants knows their rights and responsibilities. If you don’t and you happen to get into court – the Spanish tenant could claim they didn’t understand the lease. The judge will fault them for signing something they allege they don’t understand – but the judge will also come down hard on you for not providing a lease in the native language they understand, especially if all or most of your tenants speak Spanish. It’s not worth it. For my Spanish speaking tenants, not only is their lease in Spanish, I send them tenant communications and such in both English and Spanish. For what its worth, I have found my Spanish tenants to be more respectful of space and cleanliness in community settings such as Rooming Houses than others. I thought this may be to the fact that they are from Collectivist societies and here in the USA we’re more Individualistic. Again, just my general observation.
4) The whole thing about the coin washers and dryers feels very tacky and low class to me. But again, this depends on your audience and who your ideal renters are. I have 7 and counting Rooming Houses
and my rents average around 799. I feel coin laundry would make my tenants feel like they are renting some raggedy apartment instead of a true home. I want them to feel as much at home as possible. I also want to attract folks at the middle to high of the Rooming House tenant-type and this means no coin laundry. Plus, the money you would make in the coin laundry may not add up to much, plus you have to collect your coins every so often.
No stove – you would only let people cook with a microwave? Not even hot plates? I understand not allowing hot plates in the bedrooms, but to not provide an alternative, like a kitchen stove is not something I would ever do. But if you want to charge as little rent as possible, really cheap folks and those who don’t cook (who just microwave food) would still be interested, but why would you want that? You will lose a lot of prospective people simply because you don’t’ have adequate cooking facilities. A lot of my tenants cook a lot – because they have to manage their tight budgets and can’t afford to eat out all of the time. Being able to cook is actually very important to them. In my properties without a full kitchen, I still supply a rice cooker, electric kettle, and hot plates because of the lack of stove.
5) A set of house rules is a must. I build mine into my leases. You may try a manager to enforce your rules, but at the end of the day you will find that you don’t actually need a manager. The manager will come to you with every issue anyway, so you won’t be off the hook completely. You will also likely find that a “manager to enforce” will never be as respected or ‘intimidating’ per se as the landlord themselves and the threat of eviction for not following the said rules. But some people like having a middle person to relay information. It can save some time, but also cost time when you’re not directly communicating. A middle person is fine, but not necessary, usually.
6) Whether 4 roomers is manageable or not is based on your own limitations/lack thereof and lifestyle, not on the number of roomers. Some find managing 1 SFH to be too much and hire a manager for that 1 home and 1 tenant. Others will be fine managing multiple SFH or Rooming Houses on their own. How will you know what is manageable for you, if you don't try it yourself first? I also highly recommend new landlords don't hire a management company immediately. Manage it yourself first to learn, so that when/if you do hire a company to help – you're not naïve about your property. You already know the common concerns, issues, pros, and so on. It makes you a better landlord to manage your property first prior to hiring a management company. Some people hire companies out of fear that they can't do it on their own. Fear isn't the best way to make decisions; in my perspective. It can be nerve-racking – but landlording is for the long-term investor. So this initial growing pain will be very beneficial. LEARN your property. UNDERSTAND your property. Knowledge is power. Knowledge mitigates risk. Only then, are you ready to pass it onto someone else for safekeeping.
Good luck!
~ Ebony
