Recently, I had a chance to talk with a married couple that I’m friends with. This couple rents out their condo unit outside of the Boston Area. The decision for them to rent out their condo was out of necessity because they were expecting a child and needed a bigger place to live. Since they couldn’t sell their condo unit in this soft real estate market, they bought a house a few months ago while still keeping their condo unit to rent it out.
We were catching up on life and what not and they told me about their first tenant in their condo unit who had trouble paying the rent. The husband of my couple friend began venting his frustration and went on a rant about the tenant getting a free ride in life for nearly 6 weeks.(the length of time it took for her to move out). He was explaining the aggravation of getting a response such as “the checks in the mail.”
This is when I began to take mental notes because it would be a great topic to write a post about the differences of renting out a room in your house versus renting out your entire property to a tenant. In the case of the former, where a room is rented out, the landlord would be sharing the same living space of the property while the latter would have the landlord be some distance from the rental property.
The concept of being a live-in-landlord does seem out of the ordinary, but that is what I am currently doing – I’m renting out my room while living in another part of the house. After conversing with the married couple, the prevalent advantages are:
Limiting Creative Decorations – I’m not opposed to creativity, but when it comes to marking up nicely painted walls that I laboriously sanded and painted, I definitely want to have a say what kinds of mounting fixture can be placed on the walls. I have no problems with tenants putting penny nails to hang up pictures, but the moment they do something big say, relocate a mount a flat screen TV – I’ll know about it.
Keeping it Clean – at any point, if you decide your house is getting dirty, you can tell your roommates its time to pitch in and clean the common areas. On the other hand, if you’re renting out the entire unit, your tenants will be indifferent about the upkeep and longevity of floors, walls and such.
Impossible to Avoid – A phone call or e-mail can easily be ignored, but a face-to-face conversation is not so easily avoidable. When you’re a live in landlord, it’s almost impossible to avoid you when it comes time to pay the rent. In the case of my couple friend who had a person freeload it for nearly 6 weeks before getting rid of the person, there was no way for them to wait up at night and approach the non-paying renter.
I’m not advocating that people switch from renting out their entire rental property to renting out individual rooms from their rental property. What I am stating are the differences between my couple friend and I have when it comes to our real estate endeavors. The differences do seem to ease some logistical issues. I simply thought sharing them via blog post would make for an interesting topic.
In the end, the goal for either case is to keep the place rented to reliable tenants who are happy paying for a place to live.
I may have overlooked other advantages. If anyone of you can think of anything else, please do share.