Understanding Zoning and Regulations for Rooming Rentals

[Leana Ruggles]

Hello, just a little background, I just started looking into real estate investing not too long ago and am still very much in my research and learn as much as I can phase. So any help, advice, or guidance will be extremely appreciated. But, I am thinking about house hacking in the near future and renting out by the room. Using my VA home loan and renting out the other bedrooms I figured that would be the safest way to get started.

Currently thinking that I will be looking at properties in St. Cloud, MN as it's close to where I'm currently living, as well as being close to a popular state university. I've been "analyzing" some properties on Zillow for practice and to see if this would even be feasible for me to accomplish, I haven't found any properties under 4 beds that would cash flow, however there are properties that have more rooms within my pre-approval price range that look a lot better on paper. I might be calculating things poorly or overlooking something, but I'd prefer to be on the safe side. 

In my city's codes and ordinances it states that one of the common rental property violations is having "over four unrelated individuals residing in a dwelling unit" would the dwelling unit be considered the entire house or just the part contained in the lease (aka the room)? I ask this because upon looking around Zillow I found a "residential-single family" home that has 12 bedrooms and the description claims that all 12 rooms rent out and that it's already being filled for the upcoming college year. Wondering how this is possible with the city codes, I did more research and found that you can apply for a lodging license if you are renting out 5 or more beds. But the property in question is zoned as a residential single family home... just curious on how all of that works together so that I don't end up violating any laws in the future while still being able to make a profit.

- So questions I have:

What is considered a "dwelling unit"?

Are you able to rent out more than 3 or 4 rooms in a single family house?

Can you obtain a lodging license if the property is zoned for residential single family?

Can it still be considered my primary residence if it has a lodging license or would that move it to more of a business type property?

Would I still be able to use a primary residence loan (such as VA) if I got a lodging license and rented out more than 3 rooms?

Is there anything else that I should be considering while I'm still in the very beginning stages of looking around/researching?

Any advice to steer me in the right direction is of great value to me, thank you for your time and help!