Although Student housing markets may differ slightly depending on the region, it goes without saying that all rental Property owners are looking to maximize their profits and keep vacancies low. In order to achieve this, some property owners Rent out their houses by-the-room instead of renting out the entire property.

This is particularly popular in student housing, where a landlord will rent a property to several unrelated individuals. Since many first-year university students don’t have a lot of friends (especially those students who have moved from another city) or know other students who are also looking for housing, they often decide to rent a place on their own. However, given the high rent prices in today’s market, many of these students opt to rent by-the-room. This option also helps saves time and the hassle of trying to find reliable roommates.

Here is why renting out a home by the room can be beneficial for a landlord:

Increased profitability
A property owner can typically rent out a 4-bedroom house in the Greater Toronto Area with an average monthly rent of $3,000. However, the same property owner could easily charge a monthly rent of $850 per room, generating an additional $400 in revenue. The rent-by-the-room model also justifies charging more for different bedrooms, based on size or amenities. For instance, the landlord could charge $1,000 for a master bedroom with an en-suite compared to $800 for a small bedroom.

Generates more tenant leads
A landlord can increase the amount of leads they receive by offering both by-the-room and by-the-unit rental rates. Any ad for a rental property in the desired area will draw its share of student inquiries, but if a property owner is renting the unit out by the room, there will be a high number of individual students replying to the ad. This would undoubtedly help property owners to rent their rooms and units faster. In addition, the rent-by-the-room model attracts many international students with a limited budget who prefer this option.

Decreased risks
It can be extremely difficult to find a group of responsible students to rent a multiple-bedroom home. In comparison, finding suitable individual tenants that have the necessary criteria can be a much easier task. It’s also easier to find a single person to replace a tenant who is leaving a by-the-room rental. And as the landlord screens prospective tenants looking to take over the vacant room, he or she can continue collecting income from the other tenants in the house.

Although it is ultimately up to property owners as to whether they want to rent by-the-room or by-the-unit, it’s an effective option that could create greater income and fewer problems. Before you decide to rent your property out by the room, make sure you look into any city by-laws which may exist.

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