Rethink house share plan

Dear Property Guy:

I have a house by the OSU Bend campus that rents for $2,000 a month. If I rented it out on a room-by-room basis, the total rent would be substantially more. What do you think?

— Bend Rents

Dear Bend:

What do I think? I think you haven’t thought this through.

You are proposing acting more like a hotel than a rental house. Which is cool, but creates its own set of problems. You are multiplying rent collection, tracking activities, and hassle factor exponentially.

What happens when one renter eats another’s sandwich? Leaves the bathroom a mess? Has a “friend” staying over every night? Who do you bill when the kitchen gets trashed? What happens when one roommate assaults another? This is all real stuff. Now think if you really want to be in the middle of any of that.

OK, that’s worst case. Other things to consider are: increased turnover, paying utilities yourself rather than charging tenants directly, and increased wear and tear. You’ll also need to consider your inability to charge for damage in common areas, such as: kitchen, bathrooms and living room.

A property manager may help (I wouldn’t touch this), but expect to pay a much higher percentage than a conventional arrangement. Also remember they will charge an onboarding fee with every tenant change, which can be substantial.

None of these are insurmountable, but you’ll need to do the math and decide if the additional rent is worth the increased hassle, costs, and liability. In the end, it’s your call, but I’d stick with your current arrangement.

— Mike

Dear Property Guy:

I moved out last month and haven’t gotten my security deposit back. Landlord says he’s still getting estimates and isn’t ready. Help?

— Money Please

Dear Money:

This is one of the areas I tell my property-owner clients to not make any mistakes, because the legal exposure is high. Unfortunately, a lot of people blow it here.

ORS (Oregon Revised Statutes) 90.300 states that a landlord must provide an accounting of any damages and a security deposit refund or bill within 31 days of property being vacated. They can be liable for twice the improperly withheld deposit amount, plus legal fees.

That said, going to court is a hassle, expensive, and stupid. So, let’s try to avoid that. From your end, you are going to document everything going forward. Try a phone call first, it may be an oversight. They may not have your new address, truck broke down, dog ran away, mother-in-law died, whatever... If that doesn’t work, send them a demand letter for an immediate accounting and refund via certified mail. Feel free to reference the appropriate statute if you feel it will be motivating.

If this doesn’t work, it’s time to go to small claims court, or get an attorney. Small claims court can be relatively painless and judges are notoriously unsympathetic to landlords who don’t play by the rules. An attorney will either bill you hourly or on a contingency basis. That is taking money only if you win. Good luck on this one, hopefully you can resolve it with minimal drama.

— Mike

Dear Property Guy… Marginal advice on rental life since 2019. Free legal advice is worth what you pay for it. Consult a real attorney before doing anything crazy.

Mike Zoormajian is principal at WetDog Properties in Sisters, OR. WetDog provides local property management and investor services. Questions for this column and comments can be directed to:

[email protected]