Single family with rooms to rent to ready for retirement

[Diane Brennan]

With so many baby boomers needing a place to live, and I want to cash flow when I retire in 5 years needing extra income over SS, I am looking at a house in Denver suburbs that I can rent 2 rooms, and use 2 rooms for my self with one for office (as I work from home). Then when I retire in 5 years, I can rent the 3rd room I can live nearly free.  I also own a condo in Cap Hill and will rent it, with a small cash flow.  Just trying to find the right strategy.

Question is, what kind of cash on cash ROI I should be looking for?

[Craig Curelop]

@Diane Brennan - I am based in Denver as well and this is basically the exact strategy I employ. If you are looking to rent out two rooms in the Denver suburbs, you can expect to get $600 to $700 for normal rooms. No master bathroom, large closet, or anything like that. Likely your PITI (and PMI) will be around $2,000 so you will be living in the house for about $600. When you move out, you'll be basically break-even or maybe a little below after reserves. Obviously, the more bedrooms and bathrooms the more you can charge and the better the cash flow will be.

In terms of CoC ROI.... assuming you are using the low down payment option, with this strategy, I don't get out of bed for anything below 50%.