How do your boarding house rates compare to a standard grade 1 bedroom apartment in your area?

What additional expenses does the boarding house have?

Additional management ?

Repair?

Cleaning?

How do you deal with parking issues?

Zoning issues?

I'm about to get my first off the ground.

It has a 500-sf above-garage apartment on the premises. That one has been rented for about two years now, I think? It has its own kitchen/bath/closet/bedroom. It still had a ton of furniture in it, so I cleared out the junk, kept the good stuff, and spent a little $ at Tuesday Morning and Ollie's to fill in the gaps for it to be furnished. The rent from that has paid utilities/taxes/insurance while I got the main house caught up.

I started working on the main house in January 2023. It was sooooooo slow. My plumbers were great. The HVAC guy I intended to use was good for repairs, and I thought it would be good to send them the extra business. So when my garage apartment was unhappy with the heating/cooling of the window units and I decided to give them central heat and air, that let me find out that (a) even doing an install on a 500-sf apartment was a bit overwhelming for them, and (b) their communication with my electricians was nonexistent. So I pivoted to have my electricians do the HVAC installation, and everyone was relieved. Except my electricians were super-popular and were commandeered all over the place. Also, my handyman let himself be borrowed to do "just the stairs" at one place, but it ended up being an entire renovation. Etc, etc, etc. So, there have been a looooot of delays.

The electrician is coming by this afternoon to finish the final wiring. Yay.

The first thing I did was check my local ordinances to see what kind of restrictions I had.

#1, I could only do a rooming house in my town in certain zonings. This property had R-3 zoning, so I was good.

#2, if I do it, I need 1 off-street parking space [dimensions specified] for every two bedrooms. So I needed to make sure I had a place that would have sufficient off-street parking. This place has four spaces of off-street parking (two ahead, two behind), which would be good for up to 8 rooms. It was also a corner lot, so as long as I maintained sufficient distance from the stop sign/intersection, I could have extra parking off-street. From my previous experiences with shared parking, I've tried first-come first-serve. "I've been here longer." "I pay more in rent." "X hasn't moved their car in 2 weeks just to keep me from having the good spot." Etc. Fighting over "the good parking spot" is the fastest way to turn grown adults into whining children. So, the plan is for assigned parking.

#3, while I also cover yard care, utilities are going to be the biggest unknown. Just seeing the difference in the garage apartment's bill from when they had a window unit to when they had HVAC was very enlightening. I have a lockbox over the thermostat. I also have a hot water heater that should be able to handle three people. I have five rooms. I'm counting on peer pressure to keep them from having hour-long showers, running up the water bill, and keeping everyone else from enjoying the hot water. I'm also considering a coin-op washer/dryer, as a secondary way to limit utility usage rather than as an income stream.

#4, I eliminated as many common areas as I possibly could. If you're doing S8, you don't want to do this, because for shared housing, they expect with a certain number of residents, you need x sf of dining room space, and for y residents, you need that plus z sf of living room space. If you're doing eldercare, you need enough dining room space/tables/chairs for all the occupants to eat at the same time. So definitely double-check your restrictions if you're dealing with a special population. Since I wasn't, I eliminated as much of the common areas as possible so that there wouldn't be a lot of room for guests to hang out; so there wouldn't be a lot of space that's no one's, so no one feels obligated to keep it tidy; so that people wouldn't fight over the tv; etc. I'm left with two bathrooms, a kitchen, a laundry room, and some hallways. For starters, I'll probably come over once or twice a week, just to keep eyes on things as people adjust. Eventually, I'll outsource it to a weekly cleaning lady.

#5, I'm planning on using Zelle to bill my people weekly. If I could do Clearnow, that would have been awesome, but Clearnow doesn't offer that kind of flexibility. But my target pool prefers to do as much app-banking as possible, so I'm trying to catch up.

#6, I have a lot of extra furniture that I'm repurposing. I just got finished ordering some metal bedframes/headboards from Amazon for about $60 each. We'll see how they look when I get them assembled next week. I didn't want there to be a lot of crevices for bedbugs and things to hide in. Which is why I'm furnishing them--- because I don't want them to bring in their stuff. For each room, I'll be doing mattress protectors, pillow protectors, two sets of linen, two sets of towels, a dresser, a tv, a desk, a chair, a bed. Last week I picked up a dozen pillows for $2 each from a hotel liquidation warehouse. They were awesome pillows that had been downsized from a corporate AirBnB that had folded, and had almost zero usage. Just one of those pillows should have sold for $30-$50 each, so I was pleased with my deal. If I was trying to furnish each room at retail, it would be a significant expense, but I'm fortunate that I can find good bargains.

#7, I picked up some electronic locks for the front door and the individual bedrooms. I didn't want people locking themselves out if they forgot their physical key on the way to the bathroom. I also didn't want to have to change everyone's front door key every time a resident left. We have very shifty doors in my town, so I'll need to keep an eye on whether things are secure. I also know that for my locks, some of them have a little button that you can slide for privacy so that no one can enter without a physical key, even if they have the code. Next time I order locks, I'll avoid that kind.

So, in the end, I have a 1600 sf house. It was originally a 2/1 with a massive living room and an awkward little box room in the back that used to be a back porch. I took the living living room and carved it up into two bedrooms with a 3/4ths bathroom in the middle. The box room would have made a nice bedroom, but it would have also removed the second egress, which is a safety issue. So I made it into a very small bedroom and would price accordingly. If I wanted to, I could have created yet another bedroom out of a storage room, but I didn't because I wasn't confident in how it would heat/cool. If I wanted to, I also could have turned the largest bedroom into two smaller rooms, but I left it large.

Now it's a 5/2 under one roof, plus a stand-alone garage apartment. For pricing, I look at the local CL expectations for people who are looking to share space, and try to stay consistent. Then I skew the room rate so that better amenities = higher price, and lesser amenities = discount.

Ignoring the garage apartment, if I have everything rented at the prices I'm expecting, each week I should expect to gross the price of a month in a 2-bedroom. Out of that will come utilities, cleaning, maintenance, yard care, etc.

Current obstacle: I'm looking at doing wall-mounted tvs because my market loves stupidly huge tvs. I'm trying to figure out which way to point them so that the majority of the sound projects towards the exterior of the house. (The sound travels forwards, towards the listener, right?) Even though I soundproofed all my walls and bought solid-core doors and will be adding in throw rugs to help absorb sound, my market seems to think that no one else in the world possesses a radio or a tv and it is their duty to share it with others. -_- That's going to be one of my big obstacles.

One bedroom apartments in my area go for 1200 to 1700 a month plus utilities. My rooms go for $ 185 a week (or 800/no) all inclusive of utilities and internet. They paid a non refundable move in fee of $ 300 plus the first week's rent and they're in. Most are weekly or bi-weekly pay. Monthly pay is only for those on SSI. All money is collected via cash app. I have one guy who pays cash and one is pays via cash transfer on QB. I use QB to e-mail all bills and to track A/R.

I don't spend any more time than I would at apartments. I have nine rooms. I think if you have 20 rooms plus, that's a different business. I pay for everything but my margin is still around 60%.

My place has street parking only but most don't have cars. The bus stop is right outside.

I have cleaners come in every other week to clean common areas.

Repairs are the normal stuff you'd have for apartments and are limited mainly to plumbing type stuff. Since I have more than one common kitchen and bathroom, it's easy to shut one down temporarily for repairs. Rooms rarely need anything other than cleaning on turnover. Turnovers are easy given that the space is limited. I no longer allow tenants to move in furniture. I supply all furniture. That avoids getting stuff moving crap they leave behind. They literally bring themselves and their clothes and leave with the same.

One bedroom apartments in my area go for 1200 to 1700 a month plus utilities. My rooms go for $ 185 a week (or 800/no) all inclusive of utilities and internet. They paid a non refundable move in fee of $ 300 plus the first week's rent and they're in. Most are weekly or bi-weekly pay. Monthly pay is only for those on SSI. All money is collected via cash app. I have one guy who pays cash and one is pays via cash transfer on QB. I use QB to e-mail all bills and to track A/R.

I don't spend any more time than I would at apartments. I have nine rooms. I think if you have 20 rooms plus, that's a different business. I pay for everything but my margin is still around 60%.

My place has street parking only but most don't have cars. The bus stop is right outside.

I have cleaners come in every other week to clean common areas.

Repairs are the normal stuff you'd have for apartments and are limited mainly to plumbing type stuff. Since I have more than one common kitchen and bathroom, it's easy to shut one down temporarily for repairs. Rooms rarely need anything other than cleaning on turnover. Turnovers are easy given that the space is limited. I no longer allow tenants to move in furniture. I supply all furniture. That avoids getting stuff moving crap they leave behind. They literally bring themselves and their clothes and leave with the same.

I manage three cheap, utilitarian rooming houses for someone else. The same shabby run-down house would rent as a SFH for probably $900/mo (tenant pays utilities). She has 6-7 rooms per house and grosses $2500/house. She doesn't want to deal with the tenant drama, so I get 20% management fee. Utilities are high because these are 1900s-era houses with no insulation, lots of old single-pane windows, and old wiring. I'm guessing she nets $1500/mo per house. But given the minimal rehab her hubby did before he died, the acquisition cost was probably around $30-40K. So not too bad.

Two of the houses have parking in the back. The third--it's tight. I try to steer people there who don't have cars. Our city allows rooming houses as long as you register them.

My rooming house is a little unique, because the rooms are large enough that I allow double occupancy, and it's zoned a duplex. So there are is a kitchen and bathroom on each floor, but both floors have access to the other bathroom.

I charge $460/mo for single and $540/mo for double occupancy. I added a studio apt in the basement that rents for $730/mo. Then there's the couple that begged to rent the basement storeroom. They're paying $320/mo. (I need to raise that.)

That house is a cash COW. I'm grossing $3500/mo and netting about $3000. Utilities are pretty reasonable when you consider the number of people living there (currently 11). (I rewired the place when I rehabbed it.) I have about $150K into it, but it has new EVERYTHING--plumbing, electric, roof, windows, doors. Plus a new studio apt. Zero maintenance issues since I finished rehab.

I put in crushed limestone to add three parking spots in the backyard. I should have put in a fourth one. Street parking is first-come, first-serve. Fortunately we have a vacant lot next door.

Sisco,

Go to PadSplit.com and read their rules. Strict and reduces management energy. One big point is they do nto have comon areas other than kitchen and shared baths. No TV room or lounge.