Skip to content

October 13, 2010

10

Coping as a Live-In LandLord

by Fin Engr
Old time Milkshake Advertisement
share save 120 16 Coping as a Live In LandLord

337456258 fcb298729b Coping as a Live In LandLordMy name is Mike Choi and I look nothing like this photo, but I do run a little blog over at rentingoutrooms.com, which is my story of renting out my individual rooms to roommates. The idea is if you own your home, you can rent out an individual room in exchange for rent. This whole idea started when I decided to go back to graduate school, but I didn’t want to take on additional student loan debt to what I already accrued from my undergraduate studies. Today, I’m here to share my story of work involved making money from your extra bedroom.


Being a “live-in landlord”

I call myself a live-in landlord because a traditional landlord is someone who owns a piece of property and rent it out to tenants. However, my case is slightly different – I live in my residence and rent out the individual rooms to roommates. So that’s why I call myself a live in landlord, which is like a separate sub species of landlords.

What Kind of People Move in?

All my roommates were people I found via craigslist looking for a place to live. I never had a roommate that was a friend of a friend or acquaintances. The reason is because I didn’t want to have a business arrangement with friends. If things turned south, I didn’t want to end up loosing a friend.

With that said, I’ve only rented out rooms to people I found online after meeting them in person. Over the years, I’ve lived with some interesting people. To this day, I had eight different people live in my spare rooms, some of whom rented a room for 4 months while others rented for nearly 2 years. I’ve had roommates that were working professionals, while others were working retail jobs. (Side note: the most interesting person I met was probably a guy that was finishing up his term in the Navy. Prior to him moving in to one of my spare rooms, he was stationed in Guantanamo Bay, Cuba or Gitmo as he called it.)

I’ve also had both male and female roommates. I’m not going to start a debate by discussing which sex makes for better roommates. I’ll leave it to another blog or forum.

No Time for Down Time

The rental income does come with some work. Besides, the typical landlording tasks such as: roommate searching, interviewing potential roommates, and collecting rent, I’ve plunged toilets at 6 AM in the morning and fixed a leaky hot water heater on a Saturday night. Trust me on this one. As much fun as you may think it is, it’s not fun at all.

However, it’s not always like that. Even though, there were some months where I had to do more work than other months and really worked for the rental income and there were other months where I did almost nothing and cruised. Obviously, I much prefer the latter to the former as it involved less work for the same amount of rental income.

If you have a fairly new or reliable house, the rental income can be a form of passive income. My townhouse was built in 1988, stuff here and there breaks, but I’m comfortable in doing my own repairs and don’t like to be taken to the cleaners by a sub contractor.

Fast Repairs

When you’re a live-in landlord and something breaks, it generally gets fixed ASAP because a broken hot water heater affects you as much as it affects your roommates. In fact, I probably notice when things are broken before the tenants actually do.

I’ve rented before and experienced the slow response times a traditional landlord takes to make repairs because they’re not living in the same dwelling as their tenant. I know the frustration that this attitude can bring and I try my best to avoid this slacker mentality.

In this sense, I feel my roommates have the sense of security that basic living necessities will get fixed in a timely fashion.

The Reward

When the first of the month rolls around it’s like another pay-day, cha-ching! So, it’s obvious to me, the rental income is the motivating factor for becoming a landlord. With the rental income I have received so far, it has allowed me to pay for graduate school and pay off a significant part of my second mortgage. Had I not rented out my spare rooms, I would have been about $32,000 in debt from graduate school and my second mortgage balance would have been still hovering around $35,500 versus the current balance of $18,300.

Besides, the rental income, I’ve also acquired some other intangibles – friends. After living with what were once strangers, those strangers develop into friends. When I first started to rent out my room, I didn’t realize I would make friends renting out rooms, but I can say it is a positive outcome. Even after roommates have moved out, I still keep in touch with a few of them and it’s a great feeling being able to catch up on life over a cold beer.

Any Takers on Joining the Ranks of live-in landlord?

In short being a live-in landlord is having all the responsibilities of a homeowner plus being the authoritative figure with roommates. Some may absolutely hate being the authoritative. From my experience it’s not bad. For this reason I think because you are the authoritative figure, roommates that you don’t know well will respect your place more than if you had friends as roommates.

10 Comments Post a comment
  1. Oct 13 2010

    Good take on being a live in! I guess lots of people in NY are “live in landlords” except they don’t own the apartment, they just share it with roommates. In fact, one of my friends rents a 3 bedroom apartment then sublets the other 2 rooms out. The rent that he collects from the other two almost covers the enter rent for the apartment. He’s been in there a long time, so his rent is below others in the same building.

    I’m renting out my first home that I purchased as rental property, and except for her being late on the rent, it hasn’t been too bad so far.

    Reply
    • Fin Engr
      Oct 13 2010

      Wow – that’s pretty crazy. Nice he was able to organize an almost free living situation!

      As long as it doesn’t become a recurring problem, better late than never right? Thanks for the comments!

      Reply
  2. Oct 13 2010

    I’m looking to buy a house soon and will get a roommate. But I don’t think I’ll refer to myself as a live-in-landlord anytime soon.

    Reply
    • Fin Engr
      Oct 13 2010

      Either that or the Seinfeld “Master of Your Domain”….Good luck on the home search!

      Reply
  3. Oct 18 2010

    I did it for 3 years before I got married. I had a blast and also saved a ton of money. My room-mates were always friends. People came in and out but it was always someone I already knew. I lucked out I guess. Never had much of a problem so I think it’s a great idea which allows you to save lots of money.

    Reply
    • Fin Engr
      Oct 18 2010

      James: Nice man! You didn’t want to continue the life after you got married? ;) If you can work it out – having other people pay down your mortgage is such a great strategy. Thanks for stopping by!

      Reply
      • Alex
        Nov 7 2010

        That’s what we have been doing for the past 4 years. We bought our house before getting married and started renting out a room to a friend on day one. It has been great experience,and the extra cash really helps with the mortgage. We have also become better friends because of it.

        Reply
        • Fin Engr
          Nov 9 2010

          Alex:

          Thanks for stopping by. that’s great you’ve been able to act as landlord yourself. Glad you mention developing the friendship since it’s not always about the money. But hands down, it’s a great say for your friend to save some dough (if you give them a discounted rate) while you knock a chunk off your mortgage.

          Reply
  4. Coping on the other side
    Feb 25 2011

    I’ll toss in my two cents from the other side – I’m renting a room from a live-in landlord named Joe.

    The house is small, compact, and older. Every bedroom is either directly above, directly below, or next to the living room.

    The rooms next to the living room also share a wall with the bathroom. Just lovely. All day long it’s flush flush flush plus noisy bathroom activities. (I didn’t know going to the bathroom was so noisy for some people. I suppose I’ll experience that myself when I get older.)

    Nobody in the house works; Joe has been out of work more than two years. He gets up early in the morning, parks himself on the living room couch, watches TV and drinks all day long. (Because he is sloshed all day, he can’t really drive anywhere.) Joe drinks like a fish and smokes like a chimney, and all day long I get to hear cough cough cough hack retch belch and drunken partying from the living room.

    Because Joe hardly ever gets out of the house, he has made his home his party den, and all his friends (as well as his grown children) parade in and out all day. (More flush flush flush. The water bills are astronomical and of course Joe gets his roommates to subsidize the gluttonous water/electric use of himself and his friends because he requires an equal split of utilities.)

    Shortly after I moved in, a woman moved in with Joe – as a live-in partner, not just a roommate. She also drinks all day. They get drunk early in the day and start fighting. She storms out or he kicks her out.

    Within 24 hours they make up and she’s back in the house as if nothing happened. A few days later the cycle repeats. She left and returned four times in one week. Both have been arrested for domestic violence.

    I’d move but I live on a poverty level income and can’t afford the up front costs of moving elsewhere (first, last, deposit, etc).

    I can’t get any peace and quiet and solitude here – no way to get away from the noise from the living room and no time alone in the house. I can’t even get to the kitchen or laundry room without trotting (with my laundry etc) past everyone hanging out in the living room.

    Do other people live in similar environments or is it just me?

    Reply
  5. Michael
    Sep 25 2014

    I am currently a live in landlord and my question is. What if the tenants do not pay rent ? you find yourself unable to pay the bills ,how do you get them out of your home ? We have no lease agreement ,only a paper stating how much they owe each month . I feel bad ,I rented to a family with kids ,they keep shorting me on the rent and now we are at the end of the month and they tell me they can’t pay me. what are my options ? how much notice do I need to give them to move ?

    Reply

Leave a comment

required
required

Note: HTML is allowed. Your email address will never be published.

Subscribe to comments

Spam Protection by WP-SpamFree