Renting to Roommates
Roommates add a special twist in that each one is typically contributing toward the rent. This is good and bad. You have multiple sources of income, but you also have competing priorities and motivations. Roommates are frequently my most frustrating rental units. Often this is what I experience (let’s assume the rent is $999 per month).
- Roommate 1 always pays her $333 rent on time.
- Roommate 2 has some issues paying on time, but always calls and usually pays everything by the 10th.
- Roommate 3 is always late on her rent and often short pays. It is now the 15th of the month and after repeated calls you finally get $200. She already owed you $150 from the month before for a total now of $350.
What do you do?
You can’t evict just roommate 3 as all of them are typically on the lease. Do you want to spend the money to file an eviction? Can you force the other 2 to make up the difference?
Here are some idea on how to handle this situation (preferrably before it happens):
- I got this idea from Ryan O’Neill over at Minneapolis Lofts. He has all the roommatees sign the lease, but makes one of the roommates responsible for collecting the rent and cutting one check to him. If they want to swap roommates or one is having issues, that one is responsible. Love it! This expectation needs to be set up in advance.
- When one roommate get’s behind, call a house meeting and sit them all down and explain that the other roommates need to pick up the slack.
- Send all the tenants a Cure or Quit notice. Although it is not required, it may be enough to get their attention.
- Start an eviction or go to mediation. This is a more drastic measure, but if the balance is high enough it may be worth it.
- Make sure that all the tenants receive a statement every month. They should see that roommate 3 is not paying.
Managing this multi-dimensional situation can be challenging. You just need to get out in front of the problem and stay there!
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I’ve got this exact situation and it turns out the one paying me the rent was collecting on the first and always paying late up to even the 26th. Finally I told all renters they could pay individually but if 100% of the rent was not in by the 9th i’d evict. So In writing I sent them a cure or quite on the 6th and then start eviction on the 9th. Now guess what. I get 100% of the rent. I guess sometimes you have to assert yourself as the #1 bill in the household duh on my part.
John Gall »
All great points.
Great post Scott. I have often rented some of my investment homes to roommates..I have found the key too is to have a good “leader” who will ensure that the others are paying.