All Forum Posts by: Miller McSwain

Yo! I actually just wrote the book on Co-Living (room rentals) for BiggerPockets (https://CoLivingBook.com here for 25% off).

Dude, Co-Living and PadSplit properties can offer insane cash flow. You mentioned around 12% cash on cash. That is what we are seeing in my market, Colorado Springs, also. Usually, 12-14% cash on cash for a property that is in pretty good shape.

As for the risk of becoming a "slumlord". I do think that a lot of people running Co-Living (PadSplit in particular) earn the "slumlord" tagline. In fact, that is literally why I decided to write the book: to set a standard for Co-Living.

We do a lot of things to elevate the resident experience in our properties: community events, awesome common spaces, providing shared supplies, having a monthly cleaner, etc.

This strategy is definitely a lot of management work, but it enabled me to build a portfolio that generates $10k/month in cash flow in only 2 years. Seriously powerful!

This is awesome! I just wrote the Co-Living book for BP, so I'm glad this is working well as a room rental!

Personally, I don't use PadSplit for marketing. But I'm always curious how well it is working for others. I don't know anyone using PS in OR. How quickly did you get it filled up and how is the quality of tenant?

You rock!

Hey! I actually just wrote the book for BP about room rentals: "Co-Living Cash Flow"
It will answer all of your questions in much greater detail than I will here. You can get 25% off here: https://CoLivingBook.com
The Kindle version is $1.99 on Amazon right now too

1. I imagine you'd totally get more than $300/room. For ex, we just bought a house in Colorado that would rent for $2200 as a traditional long term rental. Instead, by renting by room, we are getting $8000/month!!!!
I have a site that has a room rental estimator, so check that out: https://CoLivingPro.io
Also, you can comp rents on Roomies.com (a popular room listing site) and Zillow. Zillow has a room rental filter now :)

2. Definitely read the book for this one. THere is a whole analysis section. Some highlights:
R&M: 8%
CapEx: 7.5%
Vacancy: 10%
Be sure to also include that you (landlord) will likely pay: utilities, wifi, lawn care, cleaner, etc

Let me know if you have any questions!

Oh, hey @Crane Bristol. Didn't realize I was responding to you, haha. Hope things are going well!

Yo! I just wrote the BP book on Co-Living (25% off here: https://CoLivingBook.com)
I've looked pretty heavily into Co-Living insurance. Long story short, the answer is unclear as the strategy is in its infancy.

BUT, here is what I've learned.
From talking with lots of insurance brokers, you could be in the clear if they can find a company that:
1. Allows multiple leases (unspecified or 11+ in your case)
2. Allows leases that are less than 12 months and more than 1 month

I'm in Colorado (I think you might be too), and carriers that have met that criteria have been Travelers, Auto Owners, and SafeCo. 
DM me on insta and I can send you my insurance broker's info. He really knows what he is talking about in CO.

The issue is that in other areas, like guys I've talked to in Houston, TX, those particular carriers have pulled out, so instead they are having to use short-term rental policies which are much more expensive.

Also, be wary of Steadily. I've heard that they no longer cover Co-Living/PadSplit. And, I had a consultation with them last year and asked for apples-to-apples policies so I could compare premiums against my current policies. They sent back options that were way cheaper and assured me they were apples-to-apples. Upon further investigation though, I found that the hail deductible was way higher (not good in Colorado Springs as we replace our roofs every ~5 years due to hail).

Note: We don't use PadSplit. Instead we advertise for free on FB Marketplace, Zillow, etc with great success. It is unclear how insurance may look at PadSplits as they use the membership model rather than renting normally. So I can't speak to that method exactly.

Quote from @Lee Ouellette:

Quick question—when we talk about co-living platforms like PadSplit and Padshare, are we referring to an actual application or just the model? I have two properties I’m looking to convert, but Padshare isn’t available in my area. What platform or system are you using to handle listings, tenant placement, billing, and contracts? 

 You can totally run Co-Living properties outside of PadSplit. They are basically a listing platform, but there are LOADS of other listing platforms that are free.

We list mostly on Zillow, Roomies, and FB Marketplace.

For rent collection, lease signing, etc, we use Innago. But a lot of the property management software are great (RentRedi, TurboTenant, etc)

If you really want to get into this, I have a 1000% free Facebook community I'd love to have you in. We do monthly calls where we look at deals, review floorplans, solve tenant issues, etc. And there are lots of newbies and experts in there asking/answering questions every day!
https://millermcswain.com/community

Hey! I actually just wrote the BiggerPockets book on Co-Living (25% off here https://CoLivingBook.com)!
Personally, mine are in Colorado, BUT I'm literally looking for some in WA right now. From my research so far, WA state law prevents cities from setting occupancy limits on single family homes. This is the main regulation that can block Co-Living, but WA is good to go on that front!

Analysis of Co-Living is similar to long-term-rentals. Just be sure to include the added expenses (utilities, wifi, cleaner, shared supplies, etc). Happy to chat about it more!

Quote from @Andrew Kubik:

What system do you use to manage co-living arrangements? Do you have to use a platform like PadSplit or can you manage it through something like Rentvine? 

 PadSplit is mostly a listing service (like AirBnb). They charge 13-25% of gross rents, and in exchange, you get to list on their platform. They do have some management features like rent collection and agreement signing too.
But instead, we have been able to pretty easily find applicants on FREE services like Zillow, FB Marketplace, and Roomies. Then we do the rent collection and lease signing through Innago (also free). You could use something else like RentRedi though, they are all pretty similar.

Quote from @Luke Tamez:

How did you find out what would be the going rate for rents per room.  Was there other people around you who were doing the same?  Also for the houses you purchased and your not living in them did they have to be non restricted houses?  Wouldnt it be a multi family and if its a deed restricted community they may say something,  How did you get around it ?

I actually built a "Rentometer for rooms" type tool you can check out that estimates room rents: https://CoLivingPro.io

Otherwise, you can look up what rooms are going for on places like Zillow, Roomies, and FB Marketplace in your city!

When buying houses I don't live in and rent out the rooms, the classification depends on the city/state. Everywhere I invest, the regulations say that a singlefamily home can have unlimited unrelated persons. So no issues there.
In some cities though, you'll find regulations that say a single family home is no more than 5 unrelated persons (or something similar). So you'd want to be mindful of the number of people in a market like that!

I am a Co-Living investor (and recent BiggerPockets author about the strategy :)) in Colorado, and I am interested in using this strategy in WA also, since it seems to have favorable Co-Living laws.
Looking to connect with anyone who has experience with room rentals in Washington or knows someone who does!