Is Room Rental a Good Idea?
With many landlords still facing vacancy, they’re continuing to drop prices, pay fees, but then they don’t know what to do afterwards. Let me explain what a room rental is. Instead of having your entire apartment rented out, whether it’s a two or three-bedroom apartment rent it out to an entire group. What…
With many landlords still facing vacancy, they’re continuing to drop prices, pay fees, but then they don’t know what to do afterwards.
Let me explain what a room rental is. Instead of having your entire apartment rented out, whether it’s a two or three-bedroom apartment rent it out to an entire group. What you’ll do is rent it out by the room. You have to be very careful in the city of Boston because unless your property is zoned as a rooming house, you’re not technically supposed to rent it out by the room. So what do you need to do in order to be able to combat that?
What you’ll do is potentially have everybody on the lease. That lease also protects you.
What you want is to make sure that everyone is jointly and severally responsible for both the rent and any utilities that they need to pay. We’ve seen some landlords actually pay all the utilities. We’ve seen other landlords paid the utilities and then split it up based upon the amount of rent that the tenant is paying out of the proportion of the entire rent. It’s really up to you. Sometimes the tenant will actually just take care of it on its own.
Room Rentals Garner you more Money
Sometimes room rentals will actually get you in garner you more money than you would have gotten if you rent out the entire apartment. For example, in a two-bedroom apartment, it might have been renting for 2,000 USD but because people are more willing to actually just rent the room, they might actually only pay 1,200 USD per room, which allows you to get 2400 USD in total, which can be a really good thing as well.
Sometimes the people coming in for room rentals want a furnished space but that’s not always the case. I’m going to talk to you a little bit more about how we professionally do room rentals and how it’s different than just renting it out randomly to people because the hard part is actually making sure that people will connect and not have issues, or have conflict when they live in the unit together.
Sometimes what we do is we mark lists out our apartments to some of either the furnished rental companies or even unfurnished rental companies that rent out by the room.
Companies who handle Room Rentals
There are model companies out there from SplitSpot to Dream Homes to Bungalow. These are all very professional websites and companies that do their own qualifications of people for both money funds and just making sure that there is a good fit for one another. They’re going to be technically responsible for the rent and sometimes, the profit-sharing model.
The profit-sharing model will guarantee a minimum amount of rent and will also allow us to benefit from the actual renting out of the rooms for a higher amount. There is a cost involved with it and it depends upon the company but it is something that we do as a property management company to pre-negotiate with them the rates for at least a year to ensure that you do have income coming in.
This pandemic will not last forever, what we’re doing is trying to be proactive in finding ways to help you, the landlord, minimize any type of vacancy or headaches. If doing it by the room is the next step then we’re going to figure out ways to do it as professional as possible. If you or anyone else you know is looking for a property manager and company that’s proactive, can think outside the box to help you solve the problems that you might be having, please think of Green Ocean Property Management, you get more than a property manager you get peace of mind.
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