Renting out rooms?

Question

Has anybody ever bought real estate and then rented out each room individually? Do you generally make more money this way or is it about the same as if you rented it out to a tenant? I know Don Barden began to create his wealth that way. I figure this would work best in areas of low income people, and college students. Probably risker but is the markup greater?

I'm not going to be doing it today, but do you generally make a better profit? I'd probably furnish it with a tv, and a telephone and cable. I plan on having like a apartment building maybe about 10 units with 2 and 3 bedrooms to start out with. Off course women with the women and men with the men in each unit.

Answer 1

College student housing is done that way. People who live in houses often rent a room or two but watch zoning. Most places don't allow that many unrelated people to share single family housing.

Answer 2

I would say no, it wouldnt be a bigger profit. You could (in my area at least), rent out a 3 bedroom apartment for at least 900 a month, more if it is furnished. But to rent a room in an apartment (usually fairly small) i wouldnt pay more than 300 a month. So that puts you at about even, but now you have 3 renters per apartment to worry about not paying, vs. only 1 per apartment otherwise. Id say even an extra 100 a month isnt worth that risk. Your best bet is to buy your 10 apt complex, and make them somethin special. Clean em up real nice, upddate them, pick your area wisely, and your renters wisely. You should be able to price it to the point you can make a good, decent profit. Just dont be a slumlord, take care of your tenants.