Rooming House Tenants
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Rooming House Tenants (by GKARL [PA]) Apr 14, 2017 2:10 PM
       Rooming House Tenants (by Ken [NY]) Apr 14, 2017 2:17 PM
       Rooming House Tenants (by Nicole [PA]) Apr 14, 2017 3:36 PM
       Rooming House Tenants (by GKarl [PA]) Apr 14, 2017 4:14 PM
       Rooming House Tenants (by plenty [MO]) Apr 14, 2017 4:25 PM
       Rooming House Tenants (by Robert,OntarioCanada [ON]) Apr 14, 2017 5:10 PM
       Rooming House Tenants (by GKarl [PA]) Apr 14, 2017 5:22 PM
       Rooming House Tenants (by GKarl [PA]) Apr 14, 2017 5:26 PM
       Rooming House Tenants (by Ken [NY]) Apr 14, 2017 9:14 PM
       Rooming House Tenants (by Nicole [PA]) Apr 15, 2017 1:57 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 4:02 AM
       Rooming House Tenants (by plenty [MO]) Apr 15, 2017 5:59 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 6:22 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 6:22 AM
       Rooming House Tenants (by Ken [NY]) Apr 15, 2017 6:44 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 7:06 AM
       Rooming House Tenants (by Nicole [PA]) Apr 15, 2017 7:09 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 8:46 AM
       Rooming House Tenants (by Lynda [TX]) Apr 15, 2017 10:52 AM
       Rooming House Tenants (by Vee [OH]) Apr 15, 2017 11:18 AM
       Rooming House Tenants (by WMH [NC]) Apr 15, 2017 11:29 AM
       Rooming House Tenants (by GKARL [PA]) Apr 15, 2017 12:08 PM
       Rooming House Tenants (by GKarl [PA]) Apr 15, 2017 1:49 PM
       Rooming House Tenants (by BRAD 20,000 [IN]) Apr 15, 2017 10:54 PM
       Rooming House Tenants (by Andrew, Canada [ON]) Apr 16, 2017 4:37 AM
       Rooming House Tenants (by GKARL [PA]) Apr 16, 2017 10:11 AM
       Rooming House Tenants (by GKARL [PA]) Apr 16, 2017 10:15 AM
       Rooming House Tenants (by Deanna [TX]) Apr 17, 2017 9:41 AM
       Rooming House Tenants (by GKARL [PA]) Apr 18, 2017 6:42 PM
       Rooming House Tenants (by GKARL [PA]) Apr 18, 2017 6:52 PM
       Rooming House Tenants (by Nicole [PA]) Apr 18, 2017 7:25 PM
       Rooming House Tenants (by Still Learning [NH]) Apr 18, 2017 7:47 PM
       Rooming House Tenants (by GKARL [PA]) Apr 19, 2017 4:42 PM

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Rooming House Tenants (by GKARL [PA]) Posted on: Apr 14, 2017 2:10 PM
Message:

Since last weekend, I've rented all but one of my rooms in my rooming house and two people are coming tonight to look at the remaining room. The building also has a two bedroom apartment that I've been getting a tsunami of calls on. Here's the rollup on the tenant demographics for the folks I've placed. All are working people:

Room 1--A young couple. The guy works is a customer service rep selling mobile phones and the girl works at a temp agency. They were living in a relative's spare room and the relative is moving so they have to move and can't afford apartment rent in this area. Both of them make $ 10.00 an hour. Girl works PT. Room is $ 600/mo

Room 2--A lady with epilepsy. Was awarded SSI disability of $ 1100/mo. Formerly worked as a caregiver at the local hospital but has been having seizures over the past couple of years and can't work. One of the neighbors called her when I was at the property, so she stopped by to inquire. I gave her a tour and she told me she'd be in contact upon receipt of her award. She's living in a attic locally. Rent is $ 600

Room 3-Vacant but will probably be rented tonight. Guy coming over from NJ and has picked up a job in the local area paying $ 18.00/hour. Not sure how the job is going to go and doesn't want a long term commitment, thus the need for a room. Rent is $ 550

Room 4: Single guy employed in town making $ 13.75/hour. Been on the job for a month. Was living in his girlfriend's apartment but they weren't getting along. Has baby by this same girl and requested that I allow visitation with his kid (House rules say no visitors) and allow him to keep a bearded dragon in his room for his kid. I gave permission. Rent is $ 550

Room 5: A couple. Guy works as a pallet mover at a temp agency making $ 12.50/hr and girl is currently unemployed as she has issues with her knees. He was living with someone down the street and the girl was living elsewhere in less than ideal conditions. Rent is $ 500

Room 6: A single guy employed as a forklift driver. Has been with his company 5 years. Makes $ 13/hr. Girlfriend lives down the street. His room has its own bathroom but he'll share a shower and the kitchen. Rent is $ 550

Apartment: Vacant for now as we're still doing work in there. Will go for $ 850 a month plus utilities.

I supply rooms with a TV stand, a metal bed platform, fresh linens. I also give them a roll of toilet paper, a bar of soap and a towel. It's just a little something, but they're very pleasantly surprised.

I advertise on craigslist and with a sign on the property. I charge $ 250 to $ 350 for the security deposit and they must pay that if they want me to hold the room. I give them a time certain that they must take occupancy or lose the SD. No takers on weekly rent. Everyone wants to pay monthly.

Time will tell how this works out, but these folks strike me as regular tenants who are just going for what they can afford. No one strikes me as a short term rental. I think a lot of this will be determined by how well I manage the place.

As I mentioned, this was a distressed sale that fell into my lap. I carried for 7 months and did about $ 20,000 of improvements to resolve certificate of occupancy violations. I'm still continuing to do improvements and will now use the rents to fund them. The cap rate on this is about 20 % and that includes projected vacancies and repairs. --64.121.xxx.xxx




Rooming House Tenants (by Ken [NY]) Posted on: Apr 14, 2017 2:17 PM
Message:

Sounds good,I am surprised no one wants to pay weekly,they think it will be long term but people in those situations always have life problems that create change,when someone moves push the rent up a little.I never provided linens soap or a towel but my market didn't need to.The nice thing is when they leave it is only 1 room to turn over so very fast and someone living there will be happy to do it for a few dollars. --24.25.xxx.xxx




Rooming House Tenants (by Nicole [PA]) Posted on: Apr 14, 2017 3:36 PM
Message:

other than your epileptic lady, these are all short term tenants ...nature of the lifestyle of these tenants. --72.95.xx.xx




Rooming House Tenants (by GKarl [PA]) Posted on: Apr 14, 2017 4:14 PM
Message:

What should I expect in terms of stay? Two or three months? That means constant advertising. --172.58.xxx.xx




Rooming House Tenants (by plenty [MO]) Posted on: Apr 14, 2017 4:25 PM
Message:

It will be interesting to track their situations and length of stay. You are doing amazing. Very exciting rent on! What do you expect to be your monthly cash flow after expenses? --66.87.xx.x




Rooming House Tenants (by Robert,OntarioCanada [ON]) Posted on: Apr 14, 2017 5:10 PM
Message:

While a rooming house is the most profitable rental it needs constant supervision as there always issues with people. Here with broken rental dispute process a lot of the smaller rental housing are leaving forever. Fire code is more critical for a rooming house. --186.7.x.xxx




Rooming House Tenants (by GKarl [PA]) Posted on: Apr 14, 2017 5:22 PM
Message:

Well, I'm cautiously optimistic. That's been tempered somewhat by the experiences of others with this sort of rental. Based on my projections, I expect to cash flow anywhere between 25 to 30 K annually after debt service. After getting the certificate of occupancy and once fully rented, I think I will have forced quite a bit of equity. My bank's commercial appraiser uses a 9% cap to value or about half what the actual cap is. --172.58.xxx.xx




Rooming House Tenants (by GKarl [PA]) Posted on: Apr 14, 2017 5:26 PM
Message:

Robert, you are correct. Being set for fire is a huge issue. At one point I thought I was going to have to install a new alarm system and a fire escape. That would have set me back 30-40 k --172.58.xxx.xx




Rooming House Tenants (by Ken [NY]) Posted on: Apr 14, 2017 9:14 PM
Message:

Length of stay? Room 1,he will get tired of her working part time and he will kick her out,she may well end up in Room 4 with that guy for awhile causing problems between those 2 guys before she finally just leaves the building entirely.Room 2 may well stay there awhile,at least till the disease creates problems that require her to go somewhere that she can have more attention.Room 3,he may be a little better than the rest of them so he will stay to himself,he will either go home or get a better apt elsewhere within a few months,if he starts hanging out with the others he has or will have an alcohol or marijuana problem.Room 4 see above prediction.Room 5,he will be getting rid of her within a month or two when he figures out she was just using him to get out of her last bad situation and he realizes she isn't going to produce any income.She may end up in room 4 for awhile also.Room 6,the girlfriend will move in with him or he will move out and go live with her within a couple months.Don't beat yourself up when different issues keep arising and they leave for what seem like stupid reasons,be aware they may want to come back,I rented to 1 guy about 4 different times over a 2 year period of time.Create as many rooms as you can,1 time when I was full and someone wanted a room we put a door on the front porch and got $75 week for it until fall came and I moved him into an empty room that had heat.So goes the low income roller coaster,let me know what happens with these predictions,this could be fun. --24.25.xxx.xxx




Rooming House Tenants (by Nicole [PA]) Posted on: Apr 15, 2017 1:57 AM
Message:

not going back through Ken's life plots but ... what he said.

You can and will make A LOT of money from this place. I had one with 18 rooms ... mine had to pay weekly. Cash flowed like you cannot imagine.

these folks, as you can see, are couch surfers and they can and will move around frequently. Stay out of their business. Make them work things out themselves. Expect mess and dirt. Expect little respect for your property, their neighbors and themselves. Do not expect 30 days notice, elt's, zero tolerance. Have strict payment and penalties. Figure out ahead of time how to remove them. Try to work towards weekly or biweekly rents ... do not try any creative payday plan type scenarios ...just $600 divided by 4 and they keep the bonus weeks. Pay attention and learn quickly the down falls of providing the linens.

It will take you a while but once you get into the rhythm of this lifestyle, you will do fine. --72.95.xx.xx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 4:02 AM
Message:

Ken, I asked the guy in room 6 why he wasn't moving in with his girlfriend down the street, and he said it was because "he liked his own space". He's moving from another woman, so he seems as if he's got a couple of relationships going on and that can leave you broke and dealing with a bunch of drama right there. Yes, Nicole, now that you mention it, they seem to be couch surfers, although the couple in room 1 seemed like they were fairly responsible and the guy said they planned to stay several months. My rules are no visitors and I'll have cameras up to enforce it. If room 6 wants to move his girlfriend in, I may just hit them with a sharing charge. My agreements provide for a standard cleaning/moveout fee of $ 100 against the SD and if they don't stay for 3 months, they lose the rest of it.

At this point, the biggest problem is a neighbor who thinks he should be approving the tenants. He runs up to me one day to say he doesn't like some of the folks coming by to look at the place and then yesterday tells me that he met one of the tenants and thought he was a good guy; in other words, "he approves". I understand the guy's concern, but there's only one vote on tenants and that's mine. He needs to understand that, but also understand that I want to know about any issues. I'll need to manage him to be my eyes and ears but at the same time be absolutely clear that he's not running this show but merely supporting it.

--207.172.xxx.xxx




Rooming House Tenants (by plenty [MO]) Posted on: Apr 15, 2017 5:59 AM
Message:

The neighbor,,, just Thank him, he is trying to be helpful. He could be your worst nightmare or your eyes and ears when you are not there. Keep the relationship positive! You do get the last vote. it's so much fun to read your stories and of your daily dealing on this rental. Awesome!! Niche market!! --173.108.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 6:22 AM
Message:

Plenty, I agree totally. I want to keep it positive as he can be extremely helpful but he needs to understand who's in charge. If we can structure the right relationship, he can almost be like an unpaid manager of sorts. Since he has so much of a vested interest in the neighborhood, perhaps I might consider formalizing the relationship and make him the manager. He's right across the street and there's nothing he'd like better than to control who goes in there. Too early to make that call though. --64.121.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 6:22 AM
Message:

Plenty, I agree totally. I want to keep it positive as he can be extremely helpful but he needs to understand who's in charge. If we can structure the right relationship, he can almost be like an unpaid manager of sorts. Since he has so much of a vested interest in the neighborhood, perhaps I might consider formalizing the relationship and make him the manager. He's right across the street and there's nothing he'd like better than to control who goes in there. Too early to make that call though. --64.121.xxx.xxx




Rooming House Tenants (by Ken [NY]) Posted on: Apr 15, 2017 6:44 AM
Message:

If you give him a title and any responsibility you can be held responsible when he makes a fair housing violation --24.25.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 7:06 AM
Message:

Good point Ken. Thanks. He's eyes and ears only---which he's going to be anyway. --64.121.xxx.xxx




Rooming House Tenants (by Nicole [PA]) Posted on: Apr 15, 2017 7:09 AM
Message:

I think when you first asked about this property a while ago I cautioned against a manager. Appointing someone you don't already have on your team as a manager will be more problems than you can imagine. It may be a little labor intensive for you for a while, but run the place yourself until you get a feel for how these transient type folks live. A manager will be the "boss", not you. By the time you find out about issues, you will be reactive rather than proactive. --72.95.xx.xx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 8:46 AM
Message:

Point noted Nicole. Fortunately, the place is close by enough for me to do that. --64.121.xxx.xxx




Rooming House Tenants (by Lynda [TX]) Posted on: Apr 15, 2017 10:52 AM
Message:

Well, I think you're great. Those sound like exactly the group I'd choose out of all chaff.

With the tsunami of apps for the apartment, I suggest you find a way not take any family with children age 5-20. I say that for the safety of the children living in a bldg with so many transient men. Just saying!

Are you going to allow multiple non-related room-mate type of tenants in there? How are you deciding what is your tenant model for that unit?? Best, Lynda

--108.87.xx.xxx




Rooming House Tenants (by Vee [OH]) Posted on: Apr 15, 2017 11:18 AM
Message:

I am curious about your response to a fair housing complaint when these folks appear to be in the same place however the rent is not consistent. --76.188.xxx.xx




Rooming House Tenants (by WMH [NC]) Posted on: Apr 15, 2017 11:29 AM
Message:

Vee, we have identical spaces that are different prices? It depends on when the tenants joined us, what renovations were done in which space, and just plain market at the time of rental. Nothing at all to do with Fair Housing? --173.22.xx.xx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 15, 2017 12:08 PM
Message:

About three years ago, I looked at a rooming house that was for sale. The guy never sold it due his price being too high. Anyway, he had couples and charged them a "sharing charge". He also had a mixture of single women and men in his place. I didn't hit the two couples with a sharing charge, but I may do that for future rentals on the premise that more than one is more wear and tear.

My place is set up for a resident manager to live in the apartment and the previous owner did indeed live there at one point. A few apartment prospects have expressed discomfort with the rooms while others don't care. I had given some thought to renting the apartment out as rooms as well, but I'm not licensed for that and my insurance is set up assuming that it will be rented as an apartment. (I'm paying a lower rate on the apartment). So, I decided against renting it as rooms so as to not be in a situation to void insurance if something happened. I could go back and change it to 8 rooms for insurance purposes; not sure if they'd care about what I'm licensed for, but the incremental money I'd make would be marginal (another $ 3000 annually) unless I had them pay the utilities (all electric). Running it as 8 rooms rather than 6 will remedy any issues regarding the apartment tenants though. The place has a handicap ramp on it as well, so the first floor would be attractive to someone with mobility issues.

--64.121.xxx.xxx




Rooming House Tenants (by GKarl [PA]) Posted on: Apr 15, 2017 1:49 PM
Message:

Had to turn down the lady with epilepsy. She had a boyfriend with a recent criminal record. He basically is a thief and a robber and is probably hustling her by helping her get the SSI disability. He said he'd be visiting only, but his plan was to live here. I'm not going for that. --172.58.xxx.xxx




Rooming House Tenants (by BRAD 20,000 [IN]) Posted on: Apr 15, 2017 10:54 PM
Message:

GKARL,

CONGRATS! Sounds like you are doing great! A full house (of rent!) makes LLing fun!

I find it odd they are all on monthly. These are perfect candidates who NEED PayDayPlan rent. Weekly will also get you paid more consistently. Next to impossible for $12.50 person to save up a month of rent.

Double check your approach. We advertise the monthly, bi-weekly, and weekly amounts and have them printed on the lease before the signing appointment. 70+% take the PayDayPlan rent. then a few monthlies come back and ask for it later.

Prospects read our every voice inflection, eye movement, and body language for clues as to whether they should trust us or not. We all do that. Examine your presentation. You'll make more money and be helping them avoid late fees.

Longevity: it takes $15/hour minimum to pay $500/month rent. If the household does not have that minimum they will fall behind instantly.

We find decent success with low income folks because we are the only people who are nice to them. They are sooo accustomed to be batted around and refused at every turn that when we treat them with respect they tend to stay and send their friends.

I suggest spending a little money on COMMUNITY such as a monthly cook out or game night to increase retention. Even just take everyone to MacDonalds for a "party".

Tiny Tip: I suggest 98 cent pump soap to avoid cleaning soap scum and slimy bars later. Before pump soap became popular I remember scraping soap slim with my thumbnail in every bathroom!

You are doing great! Keep the stories coming!

BRAD

PS Be sure to read Ruby Payne's A Framework For Understanding Poverty. It will teach you how to work with this group because they don't think like us.

--73.146.xxx.xxx




Rooming House Tenants (by Andrew, Canada [ON]) Posted on: Apr 16, 2017 4:37 AM
Message:

Wow....... im still stuck on the 20 percent cap rate.

Here its more like 2 percent or lower. --70.29.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 16, 2017 10:11 AM
Message:

Brad, they seem aware of the 5 week months, but some of this is the option they're being given also. If I simply say it's weekly, that's what it will be. Monthly is a bit easier for me but there's no issue with me going down there weekly to get the rent. I'd just make it due by money order on Friday and have them slip it through the office mail slot. The only people I'd have to have monthly are those on SSI where they get paid once a month.

In short, I could just remove the monthly option altogether except for those who get paid monthly. I may do just that for future rentals. --64.121.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 16, 2017 10:15 AM
Message:

Andrew, I'm assuming that your low cap rate is being made up by a high rate of appreciation? The market in my local area is not appreciating and there are still a lot of foreclosures. This was a pre-foreclosure and that I just happened to find out about. --64.121.xxx.xxx




Rooming House Tenants (by Deanna [TX]) Posted on: Apr 17, 2017 9:41 AM
Message:

Nice! It sounds like it won't be the sort of thing that runs on autopilot, but it sounds like you'll be well-compensated for the extra effort. I'm lucky to hit $550/month with just one of my better houses; I'm happy for your opportunity.

One question I do have--- what set of rules/timeline do you have for getting rid of deadbeats? For example, I know some places that do weekly rentals operate as a hotel/motel setup (and consequently pay hotel/motel tax) in exchange for being able to work with the flexibility of hotel/motel laws. You don't pay, the police come and escort you from the premises, the end. But with rooms rented on a monthly basis, it may be like trying to evict a regular sfh tenant. And with everyone in such close quarters, they'll be in each other's business, and will see exactly how much leeway the state government gives them in not paying their bills...

Anyhow, just something to keep in the back of your head, and compare it to how the reality works out. Exciting! --96.46.xxx.xx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 18, 2017 6:42 PM
Message:

Deanna:

This is a grey area. Supposedly, if the tenancy is over 28 days, LL/Tenant applies. I plan on operating under rooming house rules which means the contract controls. Generally, they just get locked out and/or police called to remove them from the property. I need some clarification from my attorney on this. I may need to adjust things to make all tenancies weekly or if monthly, limit them to 28 days. --207.172.xxx.xxx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 18, 2017 6:52 PM
Message:

Had a diabetic apply today to take a room. She's on SSI and gets $ 1200 and is going into a room that will cost $ 550/month. She has a advocacy group she's with who pays all bills for her. Apparently, she was judged as needing assistance in paying her bills, so her SSI goes to this particular group and she sends all of her bills to them for payment. They'll actually pay her rent monthly along with the bills and give her a spending allowance. She has various caseworkers who work with her providing assistance. She's gets easily winded and can't walk at a fast pace. Someone like this is the demographic I was looking for. --207.172.xxx.xxx




Rooming House Tenants (by Nicole [PA]) Posted on: Apr 18, 2017 7:25 PM
Message:

I have one guy with a representative payee ... it's great. you get your check like clockwork 3 days after the recipient's check hits her account. Never checked to see if they'd do automatic deposit rather than a paper check.

Once a year when preparing the payee's budget they'll ask you about rent and any anticipated increase. They will look out for the payee so if they feel you're charging too much, they'll convince them to get another place.

also be prepared for the tenant to ask you for money near the end of the month. they spend their cash,. Of course nothing is coming in until the next month so they'll try to convince you "I'm good for it, you know that". --72.95.xx.xx




Rooming House Tenants (by Still Learning [NH]) Posted on: Apr 18, 2017 7:47 PM
Message:

I have one tenant with a representative payee. We communicate about increase/decrease in tenant's portion of rent. Check always arrives on time.

You said over 28 days it falls under LL/tenant law. Does that mean you need a different lease or does your lease have 2 sections, addressing prior to 28 days and after? --24.61.xxx.xx




Rooming House Tenants (by GKARL [PA]) Posted on: Apr 19, 2017 4:42 PM
Message:

I may have picked up a second representative payee tenant today. I have a non-profit tenant who places people in housing and subsidizes rent contact me about this one. This retiree is getting about $ 800 in SSI and food stamps and my non-profit tenant is the rep payee. I need to compile a list of these places and use them as a source to fill my rooms. That leaves me with only one room to rent and there's a lady coming tomorrow to see it who works at the local hospital making $ 10.50/hr. She has a ten year old. Not sure if I want kids there, but I have two couples there already and she says she have relatives in the area where the kid goes after school until she gets home. I don't know if she gets subsidized child care which is a concern with the summer coming up. The room is big enough for two people.

I believe the 28 days applies to tenancy rather than time occupied. I'm thinking if I set the tenancy for weekly or a period no greater than 28 days in the case of a monthly, I'm fine. This is a question for my lawyer. Depending upon what he says, I may have to redo my rental agreements. I need to be able to lock out rather than go to court. --207.172.xxx.xxx



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