A Charlotte property owner converted a 5-bedroom rental into a 7-bedroom PadSplit coliving property, resulting in a 302% increase in net operating income and an 11.3 percentage point improvement in returns with only a $18,000 renovation investment.
PadSplit delivered $52,438 in annual NOI versus $13,031 with traditional renting, proving that shared housing can dramatically outperform conventional rental strategies.
Property profile
Address: Hunters Trce, Charlotte, NC 28262
Market: Charlotte metro area, one of the fastest-growing housing markets in the Southeast
Configuration comparison:
- Traditional model: 5-bedroom single-family rental
- PadSplit model: 7-bedroom shared housing (2 bedrooms added during the conversion)
Investment analysis
The $18,000 renovation investment focused on creating two additional private bedrooms while maintaining common areas. This strategic move became the foundation for outsized returns.
Revenue performance
Annual rental income
- Traditional SFR: $26,820 ($2,235/month)
- PadSplit: $93,488 ($7,791/month)
- Increase: +$66,668 annually (+249%)
Gross income (after vacancy & concessions)
- Traditional SFR: $22,931
- PadSplit: $82,063
- Increase: +$59,132 annually (+258%)
PadSplit’s room rental model diversifies vacancy risk. When one room is vacant, six others continue to generate income, unlike traditional rentals, where a single vacancy results in a 100% income loss.
Operating expense reality check
Annual operating expenses
- Traditional SFR: $9,900
- PadSplit: $29,625
- Increase: +$19,725
What’s included in PadSplit expenses?
The higher expense load reflects the comprehensive nature of the PadSplit model:
- Utilities (water, electric, internet, gas)
- Maintenance & repairs (increased with more residents)
- Property taxes & insurance
- PadSplit platform fees (PadSplit charges a booking fee equal to 100% of the first 10 days of rent when a member moves in, plus 8% of all subsequent rental payments throughout their tenancy.)
- Cleaning & supplies
- Enhanced property management
While expenses increased by $19,725, revenue increased by $59,132, resulting in a net gain of $39,407. The ROI on increased expenses is 200%.
Net operating income
The property owner achieved a 302% increase in NOI, more than triple the profit, with only a 5.6% increase in total investment.
Return on capital: Where PadSplit beats competitors
Unlevered annual return on capital
- Traditional SFR: 4.1%
- PadSplit: 15.4%
- Improvement: +11.3 percentage points
What this means for property owners
A 15.4% unlevered return is exceptional in real estate. For context:
- Average SFR cap rate in Charlotte: 4-6%
- S&P 500 average return: ~10% annually
- PadSplit return: 15.4%—beating both traditional real estate and stock market benchmarks
With leverage (mortgage financing), actual cash-on-cash returns would be significantly higher.
Success factors: why this worked
1. Strategic bedroom addition
Converting a 5-bedroom into a 7-bedroom property increased rentable square footage without proportionally increasing costs. Each additional bedroom added approximately $11,000+ in annual revenue.
2. Surging market demand
Charlotte’s growing workforce and housing affordability crisis have created strong demand for flexible, affordable housing options—exactly what PadSplit provides.
3. Vacancy risk mitigation
With seven individual rooms, a single vacancy represents only 14% income loss versus 100% in traditional rentals. This results in:
- More consistent cash flow
- Lower financial stress during turnover
- Reduced marketing urgency
4. All-inclusive pricing
PadSplit members pay a flat rate that covers rent, utilities, Wi-Fi, and furnishings for simple operations while reducing payment friction.
Investment payback analysis
Additional investment required: $18,000
Additional annual NOI generated: $39,407
Simple payback period: 5.5 months
The renovation investment paid for itself in less than half a year, with every subsequent month delivering incremental profit.
Key risk considerations
While the results are impressive, it’s still important for investors to consider:
Management intensity
- More residents lead to more maintenance requests and turnover management
Regulatory landscape
- Zoning restrictions may limit shared housing in some neighborhoods
- HOA restrictions should be verified before conversion
Market dependency
- Performance relies on sustained demand for affordable housing
Upfront costs
- Renovation expenses beyond the $18,000 baseline
- Furnishing costs for common areas and bedrooms
- Initial marketing and launch expenses
Comparative financial summary
A blueprint for high-performance real estate
The Hunters Trce property demonstrates how strategic property repositioning can unlock extraordinary value. By investing $18,000 to add two bedrooms and shift to the PadSplit model, this owner achieved:
✓ Nearly $60,000 in additional annual revenue
✓ $39,000+ in additional annual profit
✓ 15.4% unlevered returns—nearly 4x the traditional rental return
✓ Reduced vacancy risk through room-level diversification
✓ 5.5-month payback on renovation investment
For investors: This case study proves that shared housing isn’t just a trend but a legitimate strategy for maximizing real estate returns in markets with strong rental demand and housing affordability challenges.
For communities: PadSplit addresses the critical shortage of workforce housing while delivering superior returns to property owners for a genuine win-win model.
Next steps for property owners
Interested in replicating these results? Consider these action items:
- Assess your property: Does your layout support bedroom additions? Is there demand for affordable housing in your area?
- Run the numbers: Calculate your potential earnings in seconds with our room rental earnings calculator.
- Understand local regulations: Research zoning laws, occupancy limits, and HOA restrictions in your area.
- Connect with PadSplit: Explore requirements, platform fees, and support resources for property owners.
- Start small: Consider testing the model with one property before scaling to multiple units.
The data speaks for itself: with the right property in the right market, PadSplit can transform ordinary rental income into extraordinary returns. Talk to our team today to calculate your property’s potential earnings.
