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Boarding House vs. Roommate Rental for Landlords

Eric Guggenheimer - Tuesday, September 4, 2018

If you’re a property owner and considering renting out your home, you may be considering different types of lease options.
 
Having a roommate-style living arrangement or a boarding house both offer pros and cons for landlords. In both living arrangements, it’s essential to abide by the applicable codes in your county before renting out your property.
 
What are the differences between having a boarding house and a roommate rental? While they have a lot of the same requirements, here are the challenges each can pose for landlords.
 
The Lease Documents

The main difference between having a roommate rental and a boarding house is the documents that will be required for the lease. In a boarding house arrangement, each occupant has their own lease with a specific term.
 
However, for a house with roommates, all of the tenants will be on one lease that’s specified for the same period of time. The difference being that with a boarding house, tenants can come and go based on their individual lease while a roommate rental will have a more definitive period of time for all occupants.
 
More Responsibilities and Potential Issues
 
If you’re considering a boarding house arrangement, consider that this setup requires more tending to than a roommate situation.
 
With a boarding house, there will need to be set rules for the tenants. Oftentimes, tenants are sharing a kitchen, laundry room, and pantry. You’re more likely to run into issues such as food theft, occupants bringing in their own refrigerator, and transitioning tenants.
 
You’ll also need to have an established system for communication between tenants in addition to handling disagreements. If you’re considering renting out your property as a boarding house, you’ll need to consider how you’ll handle potential issues, transitions, and additional responsibilities.
 
Increased Risk for the Landlord
 
In the event that your property wasn’t designed to house numerous individual tenants, you’ll need to consider the risks of renting out your property as a boarding house.
 
For instance, there may not be enough hot water, heating, or cooling for your home to comfortably house the number of tenants you’re considering. The risk of accidents, including fires, also increases the more people you have in a house.
 
Other challenges you may face with a boarding house include county requirements. For example, in Fairfax County, there is a rule against having more than four unrelated parties in a dwelling. Your home may also need to have a fire suppression or sprinkler system in order to safely operate the way you intend.
 
There may also be tax ramifications to consider, so you’ll need to check with your county to see if there’s a license required or a rental tax for having a boarding home.
 
Are You Considering Renting Out Your Property?
 
Renting out your house as a boarding home may pose additional risks and challenges. With a roommate setup, you’ll be able to alleviate at least some of these concerns as a landlord.
 
Are you considering renting out your property but unsure of which route to take? At Circle Property Management, we can help you determine what your best options are for securing income for your particular property. We’ve been in business for 10 years and have deep expertise in the industry to help you have the most success at renting out your property!