If you want to rent your property in Fort Myers, you may have considered renting it out room by room. This can be a great option for houses near universities or in other more transient areas. In this post, we discuss the pros and cons of renting your house room by room in Fort Myers.
Certain landlords opt to rent out their property on a room-by-room basis, sometimes even residing in one of the bedrooms themselves. This approach proves advantageous for investors purchasing a single-family house through an FHA loan, which necessitates onsite residency for a period after purchase. While managing a room-by-room rental may appear labor-intensive, with the right tenants in place, it can yield significant benefits. Continue reading to explore the advantages and disadvantages of adopting this strategy for renting out your house in Fort Myers!
PROS
Less Vacancy
Renting out the entire house poses the risk of a tenant leaving, resulting in a vacant property and loss of income. However, if you rent your house out room by room and a tenant departs, other areas remain occupied, reducing the likelihood of complete vacancy. This arrangement helps maintain a steady income stream, as the property is unlikely to ever be entirely vacant.
More Control
When you are renting out rooms, typically the landlord/owner will live onsite as well. Your tenants are renting their room and some shelf space in the kitchen. They are usually welcome to common areas as well so long as they handle their share of the upkeep.
More Money
Consider a scenario where you own a 5-bedroom home. You reside in one room and rent out the others for $500 each, generating $2,000 monthly. However, if you were to rent out the entire house, the total income might not match this amount. This strategy is akin to investors purchasing a large tract of land and selling off individual lots. Ultimately, adopting this approach could potentially yield higher earnings.
CONS
Utility Discrepancies
One solution is to look at average usage rates, then charge each tenant a flat fee. However, this can come back to haunt you if your tenants surpass average usage. At the end of the day, it’s your name on the accounts.
Arguments Among Tenants
Having multiple tenants in one property can lead to inevitable tensions. It’s crucial to draft a lease that is as specific as possible to serve as a tool for mediating differences among tenants. Clear rules should be outlined, and everyone must respect each other’s space. If tenants fail to adhere to these rules, you may need to request that the offending tenant find alternative accommodation.
Common Area Disputes
When you have tenants renting out their rooms individually, it leaves room for disputes over the common areas. Make sure the lease lays out some ground rules regarding noise, guests, and other things that may pose a problem.
Renting a house out room by room typically requires one individual to oversee the property comprehensively. In most cases, the landlord resides in the house, eliminating concerns about liability. Living on-site facilitates easier management and understanding of the day-to-day interactions among tenants. Moreover, it presents an efficient means to rapidly pay down the mortgage using income generated from tenants.