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Not sure if you are trolling or simply floating an idea, but, let's assume it's the latter, in which case, you are really talking about a hotel, without amenities! While it 'sounds' remotely feasible, let me help you poke some holes in a few assumptions:
Any 3/2 house you can buy for $60K is probably not going to be in a rural, non-walk-to-work area -- Do you plan to park 8-10 junkers in the yard? Most $60K homes are small (1600sf or less) with small rooms that cannot be readily subdivided.
Also, unless you expect to do all of this 'room subdivision and renovation' without a contractor, building permits or real, insulated walls and halls providing separate room access, you will still probably spend a minimum of another $80K+ on your wacky renovation ... and then you will have a sub-divided crackerbox that you can only resell to someone else who wants a low-end, hotel. (Are the men expected to pass through each other's rooms to access their own? ... or are you thinking room partitions (kind of like a jail)?
Do you really expect 13 men to promptly pay $100 per week/$400 per month ... for a cubicle and a bathroom shared with 4-5 other men? Plus, your water and electric costs will likely run $500-$600 per month (not to mention the code problems you will face in providing electric for each of these subdivided living spaces). You will also need to factor-in a significant monthly expense to cover the costs of late/unpaid rent, renter eviction/ replacement and repairs/ maintenance/upkeep.
Then you must deal with insurance (hotel) and safety codes, zoning restrictions, multi-unit dwelling licenses. management (rent collection, bookkeeping, people issues, cleaning, etc). --- The list goes on and the notion of converting a 3 Bdrm house into a low-end hotel with 13 rooms ... and then running that as a 'profitable' business ... gets shakier and shakier.
If home prices are $60,000... I'd say your numbers are wrong.
When I was able to go back to work and earn some money, I started looking for a room or apartment. There were rooms advertised for "hard to rent" people, this I assumed to refer to sex offenders, ex-cons and people with prior evictions. The rooms were outrageously expensive, and I informally checked out one of the houses (didn't call, just went through the neighborhood and walked around the outside). It was a DUMP with a really seedy looking guy hanging around the front of the house.
Basically, there is a "subprime" rental market in which some people have to pay an arm and a leg to live in squalor, surrounded by bums and degenerates. The old-style "SRO" rooming houses have been disappearing for some years (regulation, government pressure, demolished, converted to other more profitable uses) and some landlords have converted large older houses to similar uses, but the SRO shortage facilitates high rents.
Not sure if you are trolling or simply floating an idea, but, let's assume it's the latter, in which case, you are really talking about a hotel, without amenities! While it 'sounds' remotely feasible, let me help you poke some holes in a few assumptions:
Any 3/2 house you can buy for $60K is probably not going to be in a rural, non-walk-to-work area -- Do you plan to park 8-10 junkers in the yard? Most $60K homes are small (1600sf or less) with small rooms that cannot be readily subdivided.
Also, unless you expect to do all of this 'room subdivision and renovation' without a contractor, building permits or real, insulated walls and halls providing separate room access, you will still probably spend a minimum of another $80K+ on your wacky renovation ... and then you will have a sub-divided crackerbox that you can only resell to someone else who wants a low-end, hotel. (Are the men expected to pass through each other's rooms to access their own? ... or are you thinking room partitions (kind of like a jail)?
Do you really expect 13 men to promptly pay $100 per week/$400 per month ... for a cubicle and a bathroom shared with 4-5 other men? Plus, your water and electric costs will likely run $500-$600 per month (not to mention the code problems you will face in providing electric for each of these subdivided living spaces). You will also need to factor-in a significant monthly expense to cover the costs of late/unpaid rent, renter eviction/ replacement and repairs/ maintenance/upkeep.
Then you must deal with insurance (hotel) and safety codes, zoning restrictions, multi-unit dwelling licenses. management (rent collection, bookkeeping, people issues, cleaning, etc). --- The list goes on and the notion of converting a 3 Bdrm house into a low-end hotel with 13 rooms ... and then running that as a 'profitable' business ... gets shakier and shakier.
The high rent assumes a certain level of nonpayment, eviction, vacancy, and turnover. It's usually easier and much faster to evict from a weekly rental than from a monthly rental, plus - this part drives me up the wall - the weekly payment makes it sound much more affordable than it is. Most people (esp the intended market here) see $100/wk as $400/mo while it's really $433. And a lot of people who don't have the up-front cash for a $433/mo room CAN afford to move in at $100/wk.
This idea would be great until the first time the cops show up for a domestic call and had to take down the residents info, it would be fast forwarded to code enforcement and your slum house would be busted......
This is already being done. Places like New York with a lot of immigrants have many such homes. I live in the Detroit area and have Hmong (Laos) neighbors who have had as many as 17 people living in their small ranch house. The babies sleep in dresser drawers or in their strollers! This is luxurious living for people from third world countries. Oh, and did I mention that all the squirrels in the neighborhood have disappeared?
Without reading all of the responses here, I think the OP will find that this is impossible to do in many municipalities. For instance, in my municipality, when we got our occupancy permit, (for a 3 bedroom home with finished basement) it stipulates a maximum of 8 family members or a maximum of 5 non-related persons (either or). There is no way they'd allow you to sublet to 13 people!
I'm sure a lot of cities and municipalities have similar conditions based on square footage and number of bedrooms.
Can you do what you've posted? Yes
Can you do it legally? No
The city will shut you down. I know people in my area who have tried this. They may get away with it for a short time, but not for long.
Depends on the city government. My first landlord would buy large antebellum homes in a southern town, rent out 10-12 rooms per house and collect $200/ month (years ago). The city did not care as they were happy to see decaying houses occupied.
I would not live in that situation again, but I was broke recent graduate and it filled my needs until I could afford better.
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