A few years ago, my wife and I bought a 4 bedroom townhouse as our first house. We realized that we could put as little as 5% down and then rent out the other bedrooms to make an overall profit on the property. 

We love investing and this seemed like a no brainer! We were able to make $100,000 profit over a 3 year period by doing this and then selling the property.

I think that we put $15,000 as a down payment and ended up making 600% return, relatively passively AND lived rent/mortage free for 3 years.

This is probably one of the best investments that we have made in the last few years (not THE best one, but up there for sure!). 

Finding and Screening Tennants

Finding good tennants was a challenge. We were not exactly thourgh when it came to screening them - we just wanted to fill the rooms and start collecting rent asap! This of course was a big mistake.

The first tennant that we had was a nice Mexican woman that was divorced. She moved in no problem atall. Unfortunately, as time went on she started acting very strangely. It started out with simple forgetfulness like leaving her bike on the driveway. Leaving cupboards open, that kind of thing. No big deal, right?

Well, it was fine until she went into full pyschosis and filled the 2000 sq ft property with gas from the stove! Luckily noone was hurt and we sorted the problem quickly. She detoriated quite quickly after that incident and ended up being sectioned to a mental hospital....leaving the rent unpaid and her room still full of her stuff. Luckily her sister paid her rent for her to hold her room with us for three months until she was released. She moved out shortly after that.

We also had a horrendous tennant that would play video games and scream all night. We ended up evicting him. We realized after these two incidences that we had to be more picky!

We mostly found our tennants on Craigslist and AirBnB. Some were amazing and we became friends with them. It was a fun experience when we had great people living with us.

What We Charged For Rent

We made sure to charge a high price for the rooms. We knew that the local market in our college town would support it. We were right and we ended up charging $850 per room for all three bedrooms - all utilities included. Needless to say, this was much less than out mortgage. We lived in the master bedroom and enjoyed this monthly passive income.

We were able to reinvest this money into new business ventures like stock trading (Kyle Dennis's Fast5 Trading Program), Jeff Bishops option trading service and Kyle Dennis's options trading Dollar Ace service.

We may return to real-estate investing, but for the time being we are pretty content to invest in building our other businesses.