Renting a 4 bedroom house to 4 seperate people

Has anyone ever tried renting a 4 bedroom house to 4 seperate people? E.G. Say a house to 4 different college students?

I could imagine if you could structure a lease correctly, you could evict one of the four people if they don’t pay their share of rent.

What do you guys think?

See
http://news.yahoo.com/s/bw/20080314/bs_bw/mar2008bw20080313093883

My parents own a duplex.

The top floor is a 5 1/2 and it’s rented to 4 people at 500$ each making 2000$ a month gauranteed. The university constantly sends batches of students to live in the 5 1/2. My mom has a special relationship with the organiser and only gets girls. 3-4 years of doing this so far and no trouble so far.

The average rent for the area for a 5 1/2 is merely 1000-1200.

Good cashflow.

Great idea, except…

if there is a fire, and the underwriters find out you were running a rooming house and not the duplex or 4 bedroom sfh on your fire policy, guess what? Right, you are screwed!

I learned this from an enterprising young man who bought 52 rental houses after he graduated from the University in Albany, NY.

I know you want everyone to have a lease so that they feel responsible, but don’t! You can only have 1 lease per apartment and collect from the students as roommates. Give one an incentive to be “the boss” and make it his or her responsibility to collect from the others.

Yeah, you might lose some rent that way, but better than a total loss for misrepresentation on your fire policy.

Hope this helps.

Bill

When I was in college, three of my friends and I rented a house. We were all on the same lease. We also paid the standard market rate for our house; not this jacked up price per room that I hear some people talking about. The per room prices are great if you’re the investor, but I would’ve told them to stick it if they tried to rent us a $500 for $2k just because we were students.

Not sure how this will work out, but I once spoke with an investor that buys many 4 or 5 br homes in SoFl and puts everyone in on a seperate lease. But he did it with a twist. He applied for a Hotel License and made the place a bed and breakfast basically but without food. he needs to keep the place furnishes, provide all utilities and that is all. In exchange he can require the bill to be paid daily, weekly, bi-weekly or monthly. He needs to pay hotel tax to the county however and he insurance policy is different. But he is making great cashflow. And the best part, since it is a hotel actually, no eviction process. IF you do not pay the hotel bill, you can have police demand the person to leave immediately just like any business.
This maybe something to look into.

I think you should put all occupants on the lease and make them JOINTLY and SEVERALLY liable. This means that the total rent is due each month and each tenant is responsible for the entire amount even though they may have an agreement to share the rent. If your total rent is not paid ALL parties will be evicted.

Gets you out of the middle of collecting partial rents from some but having to evict others. This also means that if one of the roommates can’t get along and moves out, the amount of rent due does not change – the others’ share of the rent got bigger.

This is how I handle it for roommates who want to share the rent.

Youre not thinking of starting an internet college dorm site are you?

Side note. My HOA has determined that multiple family housing is considered a business and most HOAs do not allow a business to be ran from the property…