Hey everyone,
Today we’ve got a short issue on a unique real estate company called PadSplit.
PadSplit is a new way to earn money renting out rooms in your house. It provides low-income renters with affordable, fully-furnished places to live.
They aim to help solve the affordable housing crisis, while helping you earn some extra cash.
Table of Contents
Rental property is becoming unreliable
The real estate market is challenging right now.
The traditional playbook for real estate investors isn’t as reliable as it used to be. With interest rates nearly doubling over the past 18 months, low inventory, and supply chain issues affecting new construction, house flipping is a non-starter, and managing properties is no longer as lucrative as it once was.
Rents are falling, and major companies are facing significant layoffs, leaving property owners feeling uneasy.
Low-income households
One problem is that residential real estate owners are competing for the same group of renters. They’re all seem to be going after the 9.5 million small-household renters making $50,000+ per year (i.e., the ones who can afford to live in a traditional apartment or single-family rental).
Yet against the backdrop of economic uncertainty, there’s another much larger group of Americans who are often overlooked by real estate investors: low-income workers.
These are the 14 million one- and two-person households earning less than $35,000 per year.
For these workers, traditional housing options are often out of reach due to high rent costs and barriers to entry. They usually need to earn at least three times the monthly rent to qualify for an apartment. And when America’s median rent for a studio apartment is ~$1,500 per month, it’s easy to see how many low-income renters get priced out.
High rents are just the start, too. Big upfront security deposits and credit score requirements are very real challenges not many of us think about.
Bottom line: The low-income rental market is underserved.
But there’s good news: when times are tough, innovative solutions arise. That’s where PadSplit comes in.
What does PadSplit do?
PadSplit helps rental property owners convert existing single-family homes into co-living spaces. This provides affordable housing for low-income workers while boosting earnings for owners.
They solve these issues by connecting workers with more affordable housing in the form of individual rooms in co-living properties.
As part of the largest co-living marketplace for the workforce, PadSplit hosts can double their net operating income (NOI) simply by converting under-utilized space into more bedrooms.
How it works:
- PadSplit helps match renters with available rooms in cities across the country, providing instant approvals and next-day move-ins.
- The rates are much lower than other housing types, allowing renters to save money and build their credit.
- PadSplit property owners (hosts) earn money and make a positive impact in the community, by providing affordable housing to low-income workers who need it.
- PadSplit takes care of advertising, screening, and placing renters, while hosts enjoy a more consistent income flow and reduced vacancy costs.
Closing thoughts
If you’re a property owner looking to invest while helping your community, PadSplit may fit the bill.
You can earn more, while also helping provide affordable housing for workers. Win-win.
Visit padsplit.com to learn more and start making a positive impact on your community today.
Disclosures
- We have no investments in PadSplit through our ALTS 1 Fund.
- This issue does not contain any affiliate links.
This issue has been a sponsored spotlight, meaning Alts has been paid to write an short, independent analysis of PadSplit. PadSplit is a sponsor of Alts, but this content is original and unique. This should not be considered investment advice, but rather an independent analysis to help readers make their own investment decisions. All opinions expressed here are ours, and ours alone. We hope you find it informative and fair.
