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  • Daniel Rodriguez

Potential risks of renting by the room in California

The California Budget & Policy Center reports that 17 million Californians live on rental property. Considering that, it’s no surprise that California real estate is lucrative.

If you own residential property, you might be interested in renting it out. You may also consider renting individual rooms to several tenants. Receiving multiple rent payments is a plus, but there are risks with multiple tenants.

Temporary tenants

Most landlords like it when tenants stay around – especially good tenants who pay rent on time. But people often rent rooms temporarily until they find a place with more space and privacy. Sharing space – such as a bathroom or kitchen – can quickly become irritating.

Some activities – such as playing an instrument or dating – can also lead to problems. Unfortunately, this means you’ll likely have constant tenant turnover.

Heavy workload

Managing several tenants is a lot more work than managing a single tenant. You’ll spend more time handling complaints and attending to repairs. There are also tenant matters. For example, you might need to evict someone, deal with a dispute between tenants or speak with someone about their detrimental behavior. It could turn out that having multiple tenants pays well but costs too much in the way of stress and worry.

Additional expenses

It’s easy to calculate how much you can make from each tenant based on the rent and what it needs to cover. Did you include the cost of electricity? What about water, lawn care, cable or internet? Those costs are often passed to the tenant, but not when they are only renting a room.

California real estate is often lucrative, but it’s easy to make mistakes and spend more money than you earn. So anyone thinking of becoming a landlord should consider all of their options.

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