Should You Rent Your House As a Whole Or Room by Room?

A natural goal of every landlord is to try to make as much money off of their investment as possible. Of course, this desire for profit must be balanced against the knowledge that people will only pay so much for what you have to offer.

The hard part is finding that perfect medium where you’re raking it in and your tenants don’t mind paying what you’re asking. One way that people have found to spike their profits is by renting their property by the room instead of all in one. There are both positives and negatives to this system. Let’s take a closer look.

The first thing you need to ask yourself is what kind of neighborhood are you renting in? A perfect place to rent a space room by room instead of as one big unit is if you’re close to a college or university campus. Most college kids don’t have the money to rent a 3 or 4 bedroom apartment or house, but if you divide that up into 3 or 4 separate living spaces, then you might be onto something.

You also need to take into consideration how saturated the local housing market is in that area. If there is a huge excess of apartments near this campus, then you might be left with one or two rooms rented and the others empty. But if the housing market is tight, you might have a line around the block for a room, even if they have to share bathrooms, kitchens and laundry facilities. You have to know what sort of housing market and what sort of clientele you’re dealing with before you choose to rent by the room or not.

One possible negative to renting by the room is that instead of simply collecting one rent check at the first of the money, you are now collecting 3 or 4 checks, which drastically increases your chances of someone not paying on time. It also increases the demand that you will have on yourself to fix things and to be “on call” all of the time.

Again, it comes down to the type of people you’re renting to. If you can rent to people that are independent and won’t be calling you at all hours, it might be a good idea to rent your property by the room, but if you are renting to a bunch of kids who just left home and are use to mom and dad doing everything for them, you might want to avoid it and simply rent your property as one living space.

A final aspect that needs to be taken into consideration is trust. By renting out your property room by room, it is going to increase the amount of foot traffic in and out of your property and that could lead to increased damage and wear and tear. Although the same could be true if you rent your entire property to a large family. Every situation is different so you’ll need to evaluate each applicant and the pluses and minuses that they all bring to the table.