Episode 110
The Paying Tenant Trap: What to Charge for Spare Rooms
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Most Practice Owners with a spare room will let someone in before they’ve worked out what the room is actually worth.
The logic is familiar: a paying tenant is better than an empty room. In the short term, it feels true.
But below a certain rate, a tenant starts costing you more than the room generates — in admin time, in blocked space, in the leverage you’ve quietly handed away. Todd and Sachin call this the keep-open cost, and most Owners don’t know where theirs sits.
In this episode, they walk through how to calculate it, who actually belongs in a spare room and in what order, and the agreement mistakes that lock Owners into the wrong arrangement for years.
What you’ll get from this episode:
- The hierarchy of what belongs in a spare room — from a GP first down through allied health, and why the order matters
- Why the allied health tenant who treats your space like a business beats the sessional who comes twice a week
- Sachin’s locked-in mistake: the five-year sublease that handed over front desk services and left no leverage
- Why Todd watched a $700-800k allied health operation return almost nothing — and what that taught him about keep-open cost
- The cosmetic injector scenario: why it sounds like easy income and why it almost always ends badly
- Three mistakes to avoid: room block, below-cost rates, and the agreement that locks you out of your own best use