Is renting a single family home to multiple tenants a good idea? That’s a great question. The quick answer is – it depends on the relationship of the tenants.
Renting to a married couple with children technically means you’ve got multiple tenants…the husband and wife.
The husband/wife multiple tenant situation is much different compared to two college students, who don’t know each other well, renting a single-family home. Or how about several dating couples who want to split the rent?
So, whether or not it’s a good idea really depends on the relationship of the tenants.
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When you might consider renting a single family home to multiple tenants
In my experience, here are situations when you might consider renting a single family home to multiple tenants:
- Married/dating couple
- Married/dating couple + elderly parent they are caring for
- Several college students w/ jobs + parent co-signers
When you might consider NOT renting a single family home to multiple tenants
Again, just speaking from personal experience, here are a few situations that you may want to shy away from:
- Group of young friends wanting to live together
- College students w/ parents unwilling to co-sign & financial aid as their only income
- Minors who are living independently (i.e. emancipated)
Why the relationships matter
The bottom line is it doesn’t take much for people to not get along and decide they no longer want to live together. Having people bail on a lease is obviously problematic for landlords.
Generally speaking, the stronger the relationship between people, the more likely they will work harder to make make amends, sort things out, and stick together.
Always screen your tenants well
Regardless of who you rent to and under what circumstances, you must screen your tenants well. This is your best protection against unsavory situations.
Whether you rent a single family home to multiple tenants or one tenant, here are the items you want to look at closely before entering into a lease with anyone:
- Credit history
- Criminal background
- Prior Evictions
- Length of employment
- Landlord history
Use Buildium for tenant screening
In order to do tenant screening easily and effectively, you are going to need tenant screening software. I strongly recommend Buildium. I’ve been using Buildium from the very beginning of my real estate investing career.
As a customer for the last four years, I can honestly say it’s a great software that you can grow with.
I started with Buildium when I only had two rental properties, and as I quickly scaled to nearly forty, Buildium scaled right along with me. You can try Buildium risk-free (no credit card required) by activating a 15-day free trial.