I'm thinking of one day buying a house and renting out rooms to

[raccoon]

people, possibly students. I doubt if I could maintain the house on my income alone.

Anybody ever done this? Did you have a contract with your housemates?

[SheilaT]

1. To begin with,

you have to qualify for the mortgage to buy the house. And if you're going to be a landlord, it is a Very Good Idea to have signed leases with your tenants.

The problem with students is that they are notoriously unreliable as tenants, although if you'll be living in the property yourself and simply renting out rooms, it will be somewhat different.

Oh, and you also need to find out what local ordinances are about renting out rooms in your town or neighborhood.

[InvisibleTouch]

2. Depends on how sociable you are.

A friend of my mother's has done this for years - she's at work all day, and so are her renters (she has two bedrooms for rent, and the tenants have use of the kitchen and bathroom), and since they're usually young professionals, they're often gone on the weekend at a parents', girlfriends', or boyfriends' house, so they're not in her way that much. They pay rent and their share of utilities, and are available to lend a helping hand around the house if needed. She has a pretty iron-clad contract and a set of rules from the outset (no smoking, no overnight guests, etc.). I assume there are generic renters' contracts that you can find on the web or in the library, though it probably wouldn't hurt to have a lawyer look it over, too. Then you can just keep using the same one.

It works out well for my mom's friend, but personally I couldn't stand it unless I were utterly desperate. I'm very solitary, and even someone who wasn't home much would eventually be invading my personal space. But a lot of people don't mind - so it really depends on whether you can stand other people in your living space.

[laylah]

3. Grad students

would be less risky and more reliable than undergrads. Just an FYI. I was a landlady for 2 years, lived right across the street from the property, which helped somewhat, divert problems. However, my biggest lesson was get a lease and a large damage deposit...oh, and no pets.

Good luck.

Jenn

[Democrat 4 Ever]

4. I don't know of anyone who has bought a house and rented to

students. A friend bought a house in the town where she had two kids attending college. Nothing fancy, structurally sound, etc. Her daughter and her friend used the two bedrooms upstairs, her son and a friend "dormed" in the basement. They had laundry room, quiet study areas, and short commute to campus (used public transportation).

Of course, the kids were pretty responsible, didn't wreck the place, had a nice quiet place to live and study close to campus and when they both graduated they sold the house for a nice profit to another family who was interested in avoiding dorm fees. They actually MADE money for the six years they owned the house. It didn't, of course, pay for the full college expenses for the two but it did pay many of them and both kids graduated without drowning in debt from student loans. This family is a "middle class" and couldn't pay for college outright. Both of these kids worked jobs, studied hard and it paid off. The rent paid by the other kids made the mortgage payment, taxes and insurance. Win-win for everyone.

Of course, this was back in the 90s when the adults were in charge of the economy, tuition was more affordable, grants and loans were available without breaking the bank. Not sure I would trust today's real estate market. I also think the success of this venture depended up the owners kids living in the house. They knew their parents would kill them if they trashed the place too bad.

Just remember you will be responsible for all upkeep, taxes, insurance, etc. And there is always the chance you will get a renter who won't pay on time - or not pay at all. Make sure you allow for all contingencies. You will also have to carry a significant insurance policy to cover your renters and their visitors. And make sure you meet all zoning regs and get certificates of occupancy as a rental unit that are required in your local. Just some things to consider.

[ayeshahaqqiqa]

5. My grandmother did this

back in the '50s and '60s. She had a part of the house for herself, and rented out the other rooms-some had kitchenettes, some didn't. She was able to support herself quite comfortably, which was good because her husband was seriously ill and died about 5 years after they bought the place. She kept the house for 10 more years, until cleaning got too much for her. She was in her 60s and 70s and didn't work outside the home. She never made anyone sign a lease, and rarely had trouble--but those were different times. All the students were graduate students, many of them from other countries. She prefered Kenyans as tenants because she said they kept things so clean.