i I want to buy a house and rent it out to a group of people?

Question

I wanted to buy a house that is 3 stories with a finished basement. I wanted to renovate it so I could make a bunch of smaller rooms ( get rid of the living room, dining room, make the basement 3 rooms etc) and rent it out. The place is near public transit, a huge university, and there are alot of factories that are on route near the street I'm buying the house at.

Now to do this, I'm taking out a huge mortgage, about 380 000 and I hope to make money so to pay off the monthly payments and to have extra cash as well. I could probably fit around ten people in the house. charge 600 bucks each. What do u guys think. Am I breaking any major laws. Can my renters screw me over, and any thing else you think I'd find useful. Thanks in advance

Answer 1

Kerr

You might want to research it a little bit more, renters can be hard on your property. every thing they break you have to replace, if they don't pay they're rent on time are you going to be able to make the morgage with out that money, who is going to pay the utilities? you or them, where I live the home owner is responceble for one or the other (electric or water) and the renter is responsible for the other, is there going to internet service in all the rooms, telephone, bathrooms in each room or communal bath, mens and womens bath is there going to be a on site property manager to over see every thing, to make sure that there is no problems if it is rented out to college studnts, you wouldn't want some one to get hurt on or in your house because of a college prank, is this going to be an apartment house or a rooming house (sounds like rooming house)
There is so much to think about, every thing has to meet or exceed state and county regulations, fire alarms, fire exits and so-on. I am not trying to deter you from your plans, just trying to enlighten you, my sister whom has a home right next door and has to apratments in it has been going through some hardships with renters, renters breaking things (doors,bath fixtures, kitchen fixtures, new rugs, new paints, windows) and all these things have to be replaced before and after poeple move in and out. and she is still in the hole with her morgage. (3 bdrm 2 bth lrg lvrm 2 apartments 1 studio, 1 1bdrm 1bth. house). 680,000. she got ripped but she thought the same as you are now.
all I am saying I guess, if this is what you want to do then go for it, just research the best you can before jumping in to it, you want it to work for you not against you.
so good luck with your endevor and keep the faith that it will work for you.
have a Merry Christmas and a prosperous New Year
....cya....

Answer 2

My first guess is that the plumbing and heating will be faulty for the apartments. You may also be in violation of the single family residential zoning in the town . I would guess the bank will be scared to death over loaning the money . The insurance agent will be unable to write a policy to protect everyone. Now tell us you are a draft person in an architect's office and I will say it is possible.

Answer 3

Make sure you have a separate lease and deposit for each renter, or it gets ugly when someone decides to move.

Get extra homeowner's insurance - there's bound to be more wear and tear.

Have a ***written*** set of house rules to keep the peace.

Oh yeah - DONT go cheap. Run credit on all prospective tenants (make them pay - $20-30). If they have sh-- on anyone else moneywise, they'll sh-- on you, too!!!

Answer 4

The zoning regulations in your community almost definitely do not allow the type of occupancy you have planned. This would be considered an 'illegal conversion' and could get you into trouble. Check with the local housing commission.

Answer 5

First, make sure you can rent the house to a "group," of people. There may be regulations that prohibit you from renting to groups. Check it out before you rent.