If you’ve ever had a landlord, you’re probably not interested in being one. But, done right, real estate investing is one of the most recession-proof ways to build your wealth. And with HomeRoom, you reap all the benefits of rental property ownership with zero landlord or tenant hassle. If that sounds great, but you’re still not sure where to start, you’ve come to the right place. Here are some frequently asked questions about how HomeRoom investing works from first-timers.
1. What is the typical out-of-pocket investment for a HomeRoom house?
We focus on homes that are priced between $200K-$300K. With a typical down payment of 15-20%, our investors normally pay between $50K-$100K out of pocket, including the initial make-ready and property setup costs.
2. What are the typical cash-on-cash and ROI returns I can expect?
Currently HomeRoom targets Class AB properties in the Kansas City and Dallas-Fort Worth Metro areas, and our investors can expect 7-8% cash-on-cash returns and an 25% total ROI (assuming inflation level appreciation). With our 3-year lease in place, these returns are insulated from nearly all variability except any unexpected repair costs that exceed the generous repair assumptions already included in these calculations.
3. If HomeRoom doesn’t charge a property management fee, how do you make money?
We rent homes by the room, while creating a safe community setting for tenants. In doing so, we are able to increase the total net revenue for the property. This increased revenue allows us to pass thru no-cost property management and discounted repair services to our investors.
4. What about after the initial 3-year lease term is over?
At the end of the lease HomeRoom guarantees to send renewal offers to ALL properties
As an investor, you can renew, opt out, or opt to sell with our help (for reduced brokerage fees) or through an agent of your choice
Should you desire to opt out – we are happy to connect you to one of many local property managers that can help you set up your property as a standard rental
If you sign a lease and want to sell mid-term lease, you can sell via the HomeRoom marketplace for reduced brokerage fees to one of the investors on our waiting list at any time for quick liquidity.
6. If a tenant damages the property - who pays for that?
Not you. Damage caused by the tenants will be covered by the member’s deposit, their required renter’s insurance, or by the generous liability insurance policy that HomeRoom maintains.
7. How are standard maintenance requests and repairs managed by HomeRoom?
One of the key advantages to having numerous vetted residents living in our properties is that maintenance issues are flagged quickly. Catching items such as roof leaks, pest problems, or plumbing problems can save thousands by addressing them right away.
All maintenance items are reported to us and reviewed by our maintenance team within 4 hours. For small items we will make the repair, notify you, provide documentation and pictures, and bill your account. For larger items, we will contact you in advance and let you choose between a couple recommended options.
Ready to take the next step? Book a no-commitment introductory call with our investments team here.