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Discussion Starter · #1 · (Edited)
When I was browsing rentals in Vancouver I noticed more and more people doing this. They often are rather coy in the ad, not directly stating what they're doing. The vast majority are young East Indians, often in school. Obviously the parents have bought the house and they may or may not be living in Canada with them. They typically have a renovated house that looks nicely up to date and in good condition, and usually in a lousier area like Surrey, New West, East Van, etc, where pricing is less ludicrous. They aim for their own culture for renters probably so communication is better. Understandable.

The point is as land prices escalate into the stratosphere in very high demand places like Vancouver and Toronto, people are finding it impossible to meet their mortgage payments without being more innovative and squeezing more people into their space. I noticed pricing to be generally about 60% more if the room was single than shared by another. Some are really pushing it and putting in 4 or more people in a room. That sure takes some major tolerance and cooperation! So if a bedroom for 1 person would be $800 it might be $500-600 each for 2 people or $300-400 each for 4.

The key to this working is organizing the space for the tenants very well. This is not easy! Beds are huge space wasters. I have many ideas how to deal with this but none are conventional and would meet with a lot of resistance from most renters.

But how else do you pay for your mortgage without dipping into your income? We can't have that! For those that want to pay off their mortgage in less than 10 years it becomes a huge undertaking when you only have say 4 bedrooms to rent and the house costs over a million. The math just doesn't work. You can convert the living/dining/laundry/rec rooms to bedrooms of course and this helps immensely - actually its the only way to make it work without cramming people like sardines into the bedrooms. Basement renovation helps a lot, especially if you can use egress entrances so no hallways take up space. People always pay more for a private entrance.

And all this has to conform to zoning laws!

UPDATE June 11, 2021: I should have clarified that either one can rerent a house or do this when you own the house. Obviously if you own the house there are no "landlord permissions" hurdles one needs to jump through, just zoning laws. For most people it would be best to ease into this gradually. Say you're renting an apartment and share it with a roommate which many of us have done. You've living pretty expensively if you've gotten a good deal for the apartment and you may be charging more than your share of the rent to your roommates, often because you've opted for the smallest bedroom. So you're learning about sacrifice. But some will simply charge whatever the market will bear. Here in on the prairies in a medium sized city the rental demand is high and rental costs are not so high. So if you rent a 3 bedroom apartment (about $1200) and the living room can be rented as a room, you can easily get 3 renters in there paying $400-$500 each and you're living free. But the difference in the layout and you being able to rent out the living room (and partition it without damaging the unit). If the landlord likes you they may not mind. Obviously some would resist this. So you don't move in to those places. There are always other choices.

But you want more space and you're tired of having a landlord always around. So you want a house. You look for a 4+ bedroom house, hopefully with 2 other rooms that can be partitioned (houses do tend to have living and dining rooms after all) with a cooperating layout where you don't have to traverse these rooms to get somewhere else. So now you have 5 "bedrooms" because you need one to live in. Remember that any room not rented (because of a lack of windows usually) can be used for yourself for storage or anything else. In my city there are many houses like this for about $1400 and up in lower to middle class areas. 5 x $500-$550 (or more) = $2500-$2750. You take care of the utilities but you're still way ahead every month AND you're living free AND you have control of the house AND you have control over the outdoor space. Making a small profit is important because there will be times when you don't have full occupancy obviously. And that small profit would no doubt be taxable as rental income.

But you want more control and as you're renting your options are limited for changing stuff in the home to either make it more livable or more profitable. So you opt to buy. But you've learned so much from re-renting these past years (not to mention all the savings from living rent free all the time) and choose to put this knowledge to work with your own home.
 

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Recently, finally, a lady in a North Van strata was forced to sell her TH condo for violating condo rules and renting many beds. A revolving door of shared housing. It was a very protracted matter and she was very defiant. The sale was ordered by the BC Supreme court and the strata recovered about 60k from the sale which was handled by a trustee. She also suffered contempt fines when earlier court orders were not complied with. The other strata owners were totally abused by her. I understand that price point dictates that many people have to live in strata's but I will avoid them because of issues like this, maintenance fees and sudden large assessments.

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^ Apart from having to comply with zoning by-laws (which is most unlikely), I hope the "house-owner/landlord" has insurance on his/her place with that many tenants (subletting et al) in there. For one, I (and I bet neither would the owner him/herself) wouldn't want to live next door to that fire-hazard.
 

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Discussion Starter · #6 ·
^ Apart from having to comply with zoning by-laws (which is most unlikely), I hope the "house-owner/landlord" has insurance on his/her place with that many tenants (subletting et al) in there. For one, I (and I bet neither would the owner him/herself) wouldn't want to live next door to that fire-hazard.
Why is it a fire hazard? Spontaneous combustion is a risk when multiple people share the same room? Of course they need to be quiet and respectful of the neighbors. That goes without saying. In any situation.
 

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Discussion Starter · #7 ·
Recently, finally, a lady in a North Van strata was forced to sell her TH condo for violating condo rules and renting many beds. A revolving door of shared housing. It was a very protracted matter and she was very defiant. The sale was ordered by the BC Supreme court and the strata recovered about 60k from the sale which was handled by a trustee. She also suffered contempt fines when earlier court orders were not complied with. The other strata owners were totally abused by her. I understand that price point dictates that many people have to live in strata's but I will avoid them because of issues like this, maintenance fees and sudden large assessments.
I don't think any sane person would attempt this on property they don't totally control. A condo/townhouse is not that kind of property. A single family dwelling is the only type of property that this would work with. Thankfully there are quite a few of them out there.
 

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^ Do they not cook? Hopefully they don't smoke. Being quiet would be challenging.

Don't forget the pest-control cost too with that many tenants, illegally stuffed into a room.
 

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Oh please. He lied to the landlords and didn't take care of the property. He's a fraud. Not applicable.
.. and the tenant who sublets his room to 3 other people didn't lie? I guess not unless the landlord is doing it illegally him/herself. There're plenty of these slumlords around town.
 

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Discussion Starter · #10 ·
Do they not cook? Hopefully they don't smoke.
Of course it would be for non-smokers. I should have mentioned that. 2nd hand smoke would be intolerable in close quarters.

Being quiet would be challenging.
True.

Don't forget the pest-control cost too with that many tenants, illegally stuffed into a room.
There are numerous natural pest control solutions I would use. But its a good point. I wouldn't want to do anything illegal, hence my post here. People coming and going is noticed easily by the neighbors if its obviously flouting zoning laws. It just wouldn't work long term.
 

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Of course it would be for non-smokers. I should have mentioned that. 2nd hand smoke would be intolerable in close quarters.
... you still haven't addressed the cooking issue. Will the tenants not cook?

There are numerous natural pest control solutions I would use. But its a good point. I wouldn't want to do anything illegal, hence my post here. People coming and going is noticed easily by the neighbors if its obviously flouting zoning laws. It just wouldn't work long term.
... just how many people do you think a "single" family dwelling (as per your other post above) are allowed as a "legal" rooming house?
 

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Discussion Starter · #12 ·
.. and the tenant who sublets his room to 3 other people didn't lie? I guess not unless the landlord is doing it illegally him/herself. There're plenty of these slumlords around town.
I wouldn't call someone that's doing it without damaging property and is not disturbing the neighbors a slumlord. They are saving their tenants heaps of money. If someone is going to school and working (i.e. barely sleeping) they won't be there much. A surprising number of immigrants do this. Summer rolls around and do they enjoy their break from university? No! They get another job. Or two. Its a grueling regime we can't envision. But when someone is this determined to get ahead in the world they will live in surprisingly spartan conditions and sacrifice far more in comfort and space than almost any Canadian would. If you see where they come from you begin to understand their drive. There poverty really does kill from malnutrition. Or disease and lack of health care. For them its fear that motivates them. Fear of poverty and being destitute. Our background really does shape our perspectives even if it makes little sense in our country where welfare is available.
 

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Discussion Starter · #13 ·
... you still haven't addressed the cooking issue. Will the tenants not cook?
Of course they could cook. But these are people where time is short. They're not going to spend an hour on meal prep. The microwave is their best friend. Or they could discover raw foods and how much time it saves. :) A hot plate bolted to a metal bracket that is bolted to the wall satisfies many fire standards. I bet what is most restrictive is the insurance parameters though. You'd have to abide by those. I wonder if insurance companies can stipulate the number of people living under one roof? You'd think they could but can they?
 

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I wouldn't call someone that's doing it without damaging property and is not disturbing the neighbors a slumlord. They are saving their tenants heaps of money. If someone is going to school and working (i.e. barely sleeping) they won't be there much. A surprising number of immigrants do this. Summer rolls around and do they enjoy their break from university? No! They get another job. Or two. Its a grueling regime we can't envision. But when someone is this determined to get ahead in the world they will live in surprisingly spartan conditions and sacrifice far more in comfort and space than almost any Canadian would. If you see where they come from you begin to understand their drive. There poverty really does kill from malnutrition. Or disease and lack of health care. For them its fear that motivates them. Fear of poverty and being destitute. Our background really does shape our perspectives even if it makes little sense in our country where welfare is available.
... BS. The landlord is out there to make a buck for him/herself. By allowing tenants to sublet his place already (which is illegal for rooming house) indicates he/she is a slumlord who can barely support his/her mortgage payments.
 

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Of course they could cook. But these are people where time is short. They're not going to spend an hour on meal prep. The microwave is their best friend. Or they could discover raw foods and how much time it saves. :) A hot plate bolted to a metal bracket that is bolted to the wall satisfies many fire standards. I bet what is most restrictive is the insurance parameters though. You'd have to abide by those. I wonder if insurance companies can stipulate the number of people living under one roof? You'd think they could but can they?
.. the insurance company doesn't have to stipulate anything as the slumlord ain't gonna to get any. Un-insurable. And it'll be a matter of time before the city and fire inspectors will be knocking on doors.
 

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Discussion Starter · #16 ·
... just how many people do you think a "single" family dwelling (as per your other post above) are allowed as a "legal" rooming house?
That's what I'm curious about, hence my post. The zoning laws will vary hugely area to area. Remember that this would never be done in upscale areas of cities. The land cost is just too high. More like average or a little lower than average. That's what I see over and over again in Vancouver. You don't see any on the west side, in Point Grey, UBC, the North Shore, etc, where shacks are sold for 2 mil and promptly torn down. We're talking about an older home in a slightly run down area with a superficial, cheap reno that looks neat and clean. Something no intelligent person would do for themselves.....LOL. But it works for tenants. Every single house that I saw people doing dorm style rentals was like this. They all looked very prim and proper in the photos.
 

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^ I think your last sentence sums up the "concept" .. "looks good on photos" ... I digress.
 

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Discussion Starter · #18 · (Edited)
... BS. The landlord is out there to make a buck for him/herself. By allowing tenants to sublet his place already (which is illegal for rooming house) indicates he/she is a slumlord who can barely support his/her mortgage payments.
Some people get into bad situations and are feeling very stressed and don't want to deal with tenants. So they often will rent a house at a little lower rate to only deal with one person, a calm, pragmatic problem solver who has ample financial assets and never is late with a rent payment no matter the situation. Landlords just love the idea of a place "running itself" and not bothering them with the little things. If someone is making payments and can demonstrate the condition of the place is being kept up do you really think they would want to stop that scenario if they don't really like real estate investment in the first place? Let's face it, most people get into real estate just for the perceived financial benefits. This is a terrible reason. You have to be a people person if you want to manage tenants well. A calm problem solver. And a good and resourceful negotiator when things fall apart. And firm when you need to be when people fail to abide by the rules clearly laid out from the start. You all know the "honeymoon period" where people are on their best behavior for the 1st 2 weeks then their real self emerges.
 

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Discussion Starter · #19 ·
.. the insurance company doesn't have to stipulate anything as the slumlord ain't gonna to get any. Un-insurable. And it'll be a matter of time before the city and fire inspectors will be knocking on doors.
Well I would want to do it legally so they could knock and inspect all they want. I've lived in shared accommodation that was run well. It was very smooth and you'd hardly hear anyone raise their voice in weeks. The key is to get rid of problem tenants fast. One way is to have a truck available to move them for free. Many people will move far more amiably if you move them for free. Its a cheap problem solver. Also if you know the local market you may be able to show them places that are better deals than your place to entice them to move.

Also share accommodation that caters to seniors is also very quiet. You can also target certain groups of people to cater to their needs like disabled. That's later of course. But it can be very lucrative when you specialize. I would think one of the best, especially if you were a little out of town, would be reasonably priced rehab. But that's WAY later when you're comfortable with the basics.
 

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Discussion Starter · #20 ·
^ I think your last sentence sums up the "concept" .. "looks good on photos" ... I digress.
When you are selling anything and take photos of it do you not make it look as possible observing lighting and perspective? I think we all do.
 
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