House hacking in Denver

[Connor Ryan]

My partner and I are moving back to the Denver metro area from San Diego in the next few months. Her and I are looking for a sfh w/adu/duplex home that we could house hack or could potentially turn into a rental one day if we moved. Wanted to see if anyone has experience in the area with first hand market knowledge.

Thank you,

Connor

[Jeff White]

@Connor Ryan Hi, yes, I've done that here in Denver metro as well as many other investor friends of mine.

Denver metro is a market that has a lot of opportunity and you can still cash flow as long as you are within 20 minutes of downtown Denver. There are lots of great areas to invest in, especially if you are a long-term buy and hold investor. 

One sweet spot is finding a property that is single family that has a mother-in-law apartment, basement apartment, or a separate entrance to the basement. It gives you multiple options to utilize the rent by room strategy, Airbnb, rent to a long-term tenant, or a combo of two of those strategies depending on your comfort level and time. 

If you want the best cash flow, you can find a single family house with a basement apartment, and live in one bedroom, rent out the other bedrooms upstairs, and then Airbnb the basement. It is a little more work with the Airbnb portion, but you will achieve great cash flow, probably $1000+ net cash flow per month over your mortgage.

If you want good cash flow and less work than above, you can buy a 5+ bedroom/3+ bathroom single family house, live in the smallest room, and then rent out all the bedrooms. You will get $750-800 per bedroom that has a shared bathroom, and $850-900 for the master bedrooms with private bathrooms. Net cash flow will be between $500-$1000 per month. Of course, check out occupancy limits in the county/city that you choose. 

If you want the least amount of work but lowest cash flow, I recommend finding a house with a basement/mother-in-law apartment, and live upstairs and then rent out the basement to a long-term tenant.

It really depends on you and your partner's goals. Denver metro has experience terrific appreciation like most metro markets, and over the last 40 years, Denver averages 5% appreciation, so Denver is a great bet long-term.