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Providing medical student(s) housing

Home Personal Finance and Budgeting Providing medical student(s) housing

  • Avatar mandyvitz 
    Participant
    Status: Spouse
    Posts: 1
    Joined: 09/04/2019

    I’m married to an ER Physician who is starting to see a lot of medical students rotating through the hospital he works at. We have an opportunity to purchase a large home near the hospital, we would like to rent rooms out to students while they are here short term. I would love recommendations on the best way to do this from a business and tax stand point. Should I create a small business, LLC verses my husband and I purchasing this as a personal rental property?

    Thank you

    Mandy

    #243738 Reply
    Avatar MaxPower 
    Participant
    Status: Physician
    Posts: 352
    Joined: 02/22/2016

    Are you sure that the presence of medical students is a long-term thing? In other words, why were there apparently moments before but now your husband has started seeing a lot of them? What changed, and can it/will it change again in the near future back to the way it was before? What are the medical students doing now for housing?

    One of the away rotations I did in medical school provided free housing (form style, but it was free and since I was a poor medical student was just what I needed).

    To me it seems like a huge hassle to go through all that work to only have students staying for a month or so at a time. 100% turnover every month or two would get old fast.

    Sorry I don’t have any answers to your questions.

    #243839 Reply
    Liked by ENT Doc
    Avatar SLC OB 
    Participant
    Status: Physician
    Posts: 559
    Joined: 06/23/2018

    I appreciated all of those who let me crash for a month at a time. Needs to be furnished, as they will only come with clothes.

    No idea about the taxes, my guess is that anyone I stayed with just pocketed the cash, not saying that is legal though.

    I would not buy a larger home that would be dependent on that income, make sure you can afford it without the students, in case you hate it or they stop doing rotations.

    #243841 Reply
    ENT Doc ENT Doc 
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    Status: Physician
    Posts: 3500
    Joined: 01/14/2017

    Agree with above. That is a brutal turnover that I’d want no part of. Now, if you could get a contract with the INSTITUTION they are coming from that would be another thing entirely. But that is likely unrealistic.

    #243856 Reply
    Avatar shantster 
    Participant
    Status: Physician
    Posts: 114
    Joined: 01/16/2016

    I’d be interested in anyone’s experience on this as well. We are finally moving into our home in a few weeks, and it has a small guest suite with direct street access (so separated from the rest of the home). It has a small kitchenette with minifridge, and we would be able to set it up with a toaster oven, microwave, and potentially a hotplate. We’ve debated doing this as well, but only to the medical students rotating through our department. We don’t need the income so we don’t want to advertise it broadly and deal with weird people. All the rotating students are applying to our residency program so they’ll be on their best behavior – having parties or trashing the place would be a quick way to get on the “do not rank” list.

    Would be interested to know what is needed from tax perspective and any other legal concerns with such an arrangement.

    #244062 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2806
    Joined: 01/03/2017

    I agree with passing on renting rooms to medical students. Is there a residency close by? Residents seem like a more fruitful endeavor if you’re wanting to go that route.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #244067 Reply
    Avatar Wiscoblue 
    Participant
    Status: Physician
    Posts: 152
    Joined: 05/17/2017

    You should be targeting traveling nurses and techs. They actually have money!

    #244375 Reply
    CordMcNally CordMcNally 
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    Status: Physician
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    Joined: 01/03/2017

    You should be targeting traveling nurses and techs. They actually have money!

    Click to expand…

    That doesn’t help the short term situation. I think most renters would rather have a tenant with more long term plans.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #244376 Reply
    Avatar wideopenspaces 
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    Status: Physician
    Posts: 1137
    Joined: 01/12/2016

    My friends owns a 4 plex. 2 are unfurnished long term rentals. 2 are furnished. The furnished ones are used by traveling nurses who stay about 3 months, and airbnb. The most profitable unit by far as well as the easiest to manage with the best tenants, is the one used by traveling nurses. After realizing this they stopped doing airbnb and use both furnished units for the nurses. They are thinking about turning the unfurnished ones into furnished as well because long term tenants are so much more likely to do more damage. So I think monthly turnover with med students or nurses is a good idea and not too difficult to deal with.

    #244392 Reply
    Liked by Nysoz, SLC OB
    Avatar SLC OB 
    Participant
    Status: Physician
    Posts: 559
    Joined: 06/23/2018
    Earnest refinancing bonus

    You should be targeting traveling nurses and techs. They actually have money!

    Click to expand…

    That doesn’t help the short term situation. I think most renters would rather have a tenant with more long term plans.

    Click to expand…

    But if you are renting a room out in your house… having a person there for a month, then no one for a month, would not be so bad. I remember the Medical Student Office had a list of places that would rent to a student and we would just cold call them. I still send Holiday cards to some of the families I stayed with…

    #244397 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2806
    Joined: 01/03/2017

    You should be targeting traveling nurses and techs. They actually have money!

    Click to expand…

    That doesn’t help the short term situation. I think most renters would rather have a tenant with more long term plans.

    Click to expand…

    But if you are renting a room out in your house… having a person there for a month, then no one for a month, would not be so bad. I remember the Medical Student Office had a list of places that would rent to a student and we would just cold call them. I still send Holiday cards to some of the families I stayed with…

    Click to expand…

    I think the OP was wanting to buy a different house to rent out, not rent rooms in their own house out. I think renting rooms out in the house I live in would be the last thing I would do.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #244398 Reply
    Avatar SLC OB 
    Participant
    Status: Physician
    Posts: 559
    Joined: 06/23/2018
    I think the OP was wanting to buy a different house to rent out, not rent rooms in their own house out. I

    Click to expand…

    I missed that… thought they were looking at a larger house for themselves. My bad.

    #244408 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016

    I like the idea if you are ok dealing with multiple short-term renters and the property is near your residence. Otherwise, constant round trips to solve problems may get a little tiresome. OTOH, in the right situation, you could fix up a room for your hubs to occasionally crash between shifts if he’s super-busy or on call. Do ER physicians have call? Don’t believe I’ve ever asked that question.

    There are 2 ways I’d recommend you go at this:

    • If you live in a CP (Community Property) state, form an LLC to buy the property and then report as a QJV (Qualified Joint Venture).
    • If you do not live in a CP state, use the QJV, no LLC (not allowed to use with a QJV in a non-CP state) and buy sufficient PUP (Personal Umbrella Policy) coverage.

    You can skip the LLC in the CP state and just go with PUP coverage but, unless you are in CA, I’d recommend the LLC – very easy, inexpensive, and added layer of coverage. Jmpo.

    Edited to add:

    If you have a DIY return now, might want to include as a consideration that you will need a CPA for tax prep (again, impo).

    ps – welcome to the forum!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #244411 Reply
    Avatar redsand 
    Participant
    Status: Physician
    Posts: 75
    Joined: 01/08/2017

    I think the other thing would be, if your husband is the ED physician who has to supervise any of these medical students, does the medical student paying him/your company rent to live near the hospital, with an attempt at getting the best possible grade on the rotation so they can get into the residency they want to, create any perceived (perceived by the medical school or by other students) conflict of interest for how your husband evaluates the student?

    #244421 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    Away rotation housing is usually safety and security/convenience at the best price. No one is interested in the “amenities” that a house can provide.

    The competitive short term rental rates would be a big factor to offset the additional maintenance costs. I doubt seriously if things like cleaning and normal wear and tear even cross a short term renters mind.

    Just because you have “traffic” doesn’t imply it’s very profitable. Most try to find a cheap room or extended stay hotel deal (weekly or monthly) trying to figure out how to pay rent while they are away for the rotation so any “housing” needs to be cheap as possible. Better off with residents and the traveling nurses. One may find more “sweat equity “ is required because of the turnover. Checking in and checking out would be a PITA alone, let alone unplanned maintenance and cleanup.

    #244427 Reply

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