Determining Rent by the Space

How many people does my rental hold? The first answer to this question is to check with your local housing authority. Many cities and towns have limits on how many people are permitted to live in a dwelling based on its size. You should also find out if you have a Certificate of Occupancy (CFO) which may tell you any restrictions on livable space.

Many landlords are tempted to rent to more tenants than are allowed. This may offer a short-term revenue gain, but if you get caught, the penalties can be large. Your best bet is to keep it within the limit set by you local authority. Once you get the legal stuff out of the way, consider how many people your property was meant to hold. Additional people can cause premature wear on the house's infrastructure. This not only means more money you will have to spend on repairs, but also time and effort on your part. Worn floors and stairs, plumbing problems, replacement of appliances and light fixtures can quickly eclipse the added revenue from additional tenants if you don't keep up. Too few people could mean less revenue that you collect.

If the market for rental housing in your area is good, students may be willing to share rooms allowing you to collect more rent. Always consider what the right amount of people living in the dwelling is and try to get that many. If your optimal number of tenants is 4 and you get a group of 2, consider encouraging them to get other tenants to join them before they sign the lease. If you go with just the 2 tenants, it is likely that as the year progresses they may feel the effects of paying more for rent and begin looking for discounts from you.

Also consider, that if you do rent to less than the optimal number of people, perhaps you are not charging enough for rent. Make sure you have enough common living space between rooms to accommodate all of the tenants. A Living room, kitchen with dining area, and hallways are needed for your tenants to enjoy living in your property. Happy tenants mean continuous revenues to you.