The #1 question on nearly every call I take is what PadSplit actually costs. Here's the full breakdown, host fees and tenant fees both, conservative first.

The fee that surprises people

I've taken a lot of calls with investors pricing out their first room-rental. The fees almost never kill the deal. But one of them surprises almost everyone, and I'd rather you hear it from me now than find it on your first payout.

So here's the honest version. There are two sides to this: what you pay as the host, and what your tenants pay as members. I'll cover both, because hosts ask me about both.

The host fee: the 8%

As the host, your main cost is a percentage of the rent PadSplit collects on your behalf. Think of it the way you'd think of a property manager's cut, except it's doing a different job: it covers the marketplace that finds your tenants, the payment collection, the member support, and the tech that runs the whole thing.

What it means for your underwriting: this comes out of collected rent, not off the top of your gross potential. When I pencil a deal, I build the fee in at 60% occupancy, not 100%, so the number I'm looking at is conservative from the start. Everything above that is upside.

That's the difference between this and a flat management fee. You pay on what actually comes in.

The booking fee: the one nobody explains

This is the one that surprises people. When a new member books one of your rooms, there's a placement or booking fee tied to that move-in. It's how the platform gets compensated for filling the room, separate from the ongoing service fee on rent.

Why I flag it: if you don't know it's coming, your first month's payout reads lower than you expected, and you start to wonder if the model works. It does. You're just seeing the cost of filling a room show up before the rent stacks up behind it. Once a room is occupied and stays occupied, that fee isn't recurring the way the service fee is.

This is exactly the kind of thing I'd rather tell you before you sign than have you discover after.

What's actually waivable

Not every fee is fixed. There are promotions and waivers that come and go, and they usually sit on the member side (application fee promos, for example) rather than the host side. These move, so I won't quote specifics that'll be stale by the time you read this.

The honest take: don't underwrite a deal on a promo. If a waiver's running when you list, treat it as upside, not as part of the math. I pencil deals as if every standard fee applies, so a waiver only ever makes the number better, never worse.

What your tenants pay

Hosts ask me this too, because it affects who applies and how quickly rooms fill. Your members pay their own set of fees, separate from yours. These typically include an application fee when they apply, an ongoing membership fee, and late fees if they miss a payment.

Why this matters to you as the host: you're not setting or collecting these, but they shape your applicant pool. The screening and payment structure on the member side is part of what protects you. It's worth understanding even though it never hits your P&L directly.

It depends on your property and your goals, and it's genuinely not for everyone. Rent-by-room can beat a standard long-term rental on gross because you're renting five-plus rooms instead of one whole unit. But it's management-light, not management-free: cleaning and maintenance stay with you, there's a real 60-to-90 day ramp while rooms fill, and you carry vacant weeks during that ramp.

I pencil every deal at 60% occupancy and treat everything above that as upside. If a property supports five or more rooms, has no HOA restriction, and you have capital for conversion, furnishing, and carrying costs through the ramp, the numbers often work. If you need guaranteed occupancy or can't carry a vacant month, it's probably not your fit.

This surprises people, so better to hear it up front: PadSplit does not handle evictions directly. The process stays with you and follows your local landlord-tenant law, same as any other rental.

PadSplit gives you screening tools and lets you interview and approve applicants before move-in, which is your best defense. But the legal filing and the cost are yours. Put this in your underwriting before you list, not after.

Members are typically working people — grocery workers, nurses, teachers, trade and service workers — who need flexible, affordable housing. PadSplit runs background and income verification.

As the host, you keep control: you can review booking requests and interview applicants before approving them. Most new hosts don't realize they can talk to an applicant first. That's exactly what experienced hosts do.

They solve different problems. Airbnb is short-term, and revenue swings with seasonality, occupancy, and daily management intensity. PadSplit is medium-to-long-term room rental with steadier monthly occupancy, much lighter day-to-day operation, and a lower fee load. You can't run both on the same property at once.

The honest way to decide: run the same house through three P&Ls, long-term rental, Airbnb, and rent-by-room, and compare the net, not the gross.

It depends on your specific property, zoning, and occupancy rules, and it comes up on nearly every call. The PNW is an early market for this strategy, and Seattle in particular has been actively engaged on co-living policy.

Before you fall in love with a deal, check local occupancy limits, any HOA restriction, and egress and room-size requirements. This is a starting point, not legal advice, confirm the specifics for your address with your local jurisdiction.

Run three checks before anything else.

1. Can it support five or more rooms after conversion? Below that, the economics rarely reward the effort.

2. Is it free of HOA restrictions? An HOA is the most common deal-killer.

3. Does it meet basic safety requirements like minimum room size and two points of egress?

Clear those three and it's worth underwriting. Cap at four rooms or fewer, or sit under an HOA, and it's usually a pass.

Budgets can vary from roughly $500 to $1200 per room, all-in, as a conservative planning number. Where hosts overspend is on finishes members don't care about. Where it matters is durable basics and a clean move-in experience, because move-in quality is one of the biggest drivers of how long a member stays.

It's a real line item — put it in your underwriting alongside acquisition, conversion, and carrying costs through the ramp.

The fear usually isn't the fee, it's feeling trapped on a platform you haven't tested yet. You can remove a property by notifying PadSplit support and following their off-boarding process.

The honest advice: read the master lease and exit terms slowly before you sign, understand the commitment period, and go in with the full picture. You shouldn't be surprised later by anything in that agreement.

If you need 100% passive from day one, this is management-light, not management-free. If you can't carry a vacant month during the ramp, the timing will stress you. If you want a no-money-down shortcut, there are real upfront costs. If your property is HOA-restricted or caps at four rooms or fewer, the model won't reward the effort. And if you want only the best-case story, you'll be happier elsewhere.

Knowing early that it's not a fit is worth more than a call that ends in a maybe.