A case study in a five room co-living house run entirely by a manager, three years of real net numbers

$610 a month on $71k is about 10% cash on cash. In thin rural markets a whole-house lease on a $268k house would not clear half of that, though five rooms at $700 would never fill there either. Who are the tenants, and does the house still work at $550 a room?

The repairs line at $215 a month is what I keep staring at. Five adults sharing three bathrooms and one kitchen, I'd have guessed double that. Is that number real or is it just what you've spent so far?

Six moves in a year across five rooms. Does your manager screen each one the same way you would, or did you write the criteria down and hand it over?

This is closer to the boring outcome worth aiming for than most co-living writeups, mostly because the manager was priced in from day one instead of discovered in year two. Was whole-house leasing ever on the table, and what number would have made it the better answer?

What did the den conversion cost you and did the appraiser ever count it as a bedroom?

Seven weeks on one room in November is the whole story here. I've had that same hole in a three room house and it eats a quarter. Marlow, was it price, was it season, or was it your manager sitting on the listing?

12% of collected on a five lease house is cheap, and the question worth asking is what the manager is not doing at that rate. When a room goes empty they owe you a showing, a screen, a lease, a key handoff, and a move-in walkthrough for $175 plus their percentage on one room's rent. That math works for them at scale and stops working the minute the house needs real attention. Ask them straight what their per-house labor hours look like, because a manager who is underwater on a property tends to solve it by not answering the phone.

Third year updates on a room-by-room house are rare to see written up, since most threads stop after year one, so a year three version is worth having. Two questions worth asking in a case like this: did the insurance carrier price the policy differently once told there were five separate leases, and did anything in the loan documents care?

Room-by-room houses tend to break in a pattern, so here's the pattern question. Water heater, HVAC, washer, dryer. Five adults use those the way a family of five does, but the dryer runs constantly when nobody is coordinating. Worth tracking whether any of that has been replaced yet, and whether it's inside the stated budget.

Following up on my own question, if your repairs number is really running $215 and the appliances are original, then the $610 cash flow is borrowing from a replacement you haven't made yet. That doesn't kill the deal, it just means the honest year-three number is maybe $450 once you fund it properly.

I hold land and wait, so this is the opposite of my strategy, and I still think the interesting line is the placement fee. You paid for behavior instead of paying for a title. Most management problems I hear about are pay structure problems wearing a costume.

Marlow never answered whether $550 rooms work. That's the number that decides if this travels to cheaper markets or stays a metro strategy.

In small multifamily every unit teaches something, and the useful comparison here is that five leases in one house carry roughly the management load of a fourplex, minus the four separate meters. A fourplex at least keeps tenants from arguing over whose milk it is. Is there a written house agreement the manager enforces, or does the manager handle disputes in the moment? The interpersonal side is where the hours nobody bills for tend to accumulate.

Underwriting this backward from your numbers. Gross $3,470, operating before debt about $1,970, so NOI around $18,000 a year, debt service $16,920, coverage around 1.06. That is thin. Move the manager from 12% to 15% and you lose $125 a month. Take vacancy from 4.1 room-months to 8 and you lose about $470 a month. Either one alone leaves you near breakeven, and both together put you in the hole. So the deal isn't income density, it's a bet that occupancy stays where it's been and your manager stays cheap. Marlow, what's your re-lease trigger? If a room sits 21 days do you cut price automatically or wait it out? An automatic cut at day 21 would have turned that seven week hole into three weeks and cost you maybe $60 a month in rent. That's the cheapest fix in your whole spreadsheet.