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I am under contract on a 2BR/2BA condo. After I move in, I was thinking about renting out the other bedroom as it will essentially not be required space for me other than making it a guest bedroom or "game" room of sorts. I figure I may as well try to earn some income off of it.
The individual will have their own room, a bathroom that is accessible to visitors, and a furnished shared living space. I've never been a landlord before, so I'm not familiar with pricing units out. Would you typically charge the market rate for a 1-BR in the area, would you charge less since it's a shared living space, or would you charge more because the unit is mostly furnished and they would only need to provide furniture for their room?
A lot of 1-BRs in the area are going for about $950-$1,100.
Thanks!
I see nothing wrong with what you are planning, given you have addressed the HOA issues. In my opinion a 1BR/1BA in a shared condo is worth less than a seperate property because the tenant has less privacy and control over what occurs in the property. Does your condo include other ammenities that commonly come with an apartment? Such as use of club room, swimming pool, etc?
Since you are sharing a living space you probably need to address issues such as partying, sharing of laundry, electronic and entertainment equipment, cooking and clean up, noise after hours, parties and overnight guests, parking, etc. Issues that most landlords do not have to address in a standard lease when renting out apartments or houses.
We see a lot of disputes here between roommates and renters living with a landlord, its introduces a lot more friction into the relationships, so choosing a tenant wisely is very, very important.
You are a landlord and have to follow your states landlord and tenant laws in this situation. The guy who said you are a roommate was mistaken, anytime you rent space you become a landlord. As far as rent price I would be looking at room rates and studio rates to compare to instead of one bedrooms. If the going rate for a one bedroom is only $1000 then $850 is high unless you get some social butterfly they are most likely going to stay in their room 100% of the time.
There is a difference between a boarder and a tenant. A tenant typically is renting the entire property. A boarder is usually renting just a room from a home owner who lives in the same property. A boarder often does not sign paperwork. A tenant, with perhaps the exception of a tenant-at-will, signs a lease. A property owner renting to a tenant almost always is in a much more complex situation should there be a problem with a renter and the renter needs to be evicted. The laws are a little different from state to state. So OP good to read up on those before doing anything.
I'm not saying it is. That's why I'm not renting it for the average market rent for a 1-BR. My price is well under that.
You need to price your room ( since that's the only thing you're renting out) according to what the market is getting for rented rooms. You cannot compare a one bedroom unit and one bedroom....it's apples and oranges.
You can ask whatever price you want, but that doesn't mean you'll find someone willing to pay that price. not when they can find another room, just as nice, for less. Or up their budget and rent their own one bedroom unit.
However, if you firmly believe you can rent out the room then go ahead and advertise it. If you don't get any interest then adjust your price.
In the Zillow age this is an old school mindset. People look on Zillow for a rental see something overpriced and hit ignore and will never see a price reduction happen, I know that's how I shop for a new rental to buy. If the price is too high upfront it signals me that the owner is unrealistic and would be much less willing to adjust his price/fix things than someone who is priced right, ignored and move on never to see it again, I do clear out my ignores after each buy because I want to see everything for the next time which could be as soon as 4 months in this market.
I think the price is fair but perhaps slightly on the high side for a roommate situation. I'd go lower to about 725 IMO. I mean they dont get to decide how to decorate the living room or kitchen or any of that stuff that comes with furnishing their OWN place i assume..
I would suggest you read some of the threads that discuss some of the nightmare situations folks find themselves in who rent out their shared living space. It might keep you from making the same mistakes. Seems like a background check is essential....work situation, credit history..etc.
Place an ad for $860 for a roommate plus utilities plus heating cost in a cold area in the winter and see how many people come clamoring for the place. I'm guessing you won't have any showings.
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