[Salt Lake City - Utah] Ideas for Phasing Out of SFH House Hack

[Pat Tobin]

I've been trying to brainstorm ideas about what moving out of my SFH house hack would look like after a couple years. I purchased a SFH 6 bedrooms / 4.5 baths in Salt Lake county in the Silicon Slopes area with exploding growth and very expensive apartments. Currently, I rent to 4 tenants who rent out individual bedrooms. 2 of the bedrooms have private full baths in basement and the other two tenants share one full bath upstairs. The master bedroom is on the main floor off the kitchen area. The girlfriend also pitches in reduced rent to have a bedroom for her own guests/friends who visit. Everyone shares the kitchen, garage, and driveway. Rooms with bathrooms earn $750 - 850 / month depending on size and the rooms with shared bathrooms are a flat $750. Utilities are included in the rent to keep it easy.

I've been cash flowing ~$800-900 a month. Almost no vacancy, high demand for single room rentals.

I currently live in the master bedroom with my girlfriend. The gf isn't the biggest fan of having roomates (she's a team player but claims she can't do this for too long, OK) and we have begun tossing around the idea of moving to a different part of the city to another property with the intent to rent out a basement or ADU with more privacy for the two of us. I am adamant about not paying a dime for a mortgage but it's the same real estate investing with a significant other story. I am unsure how I will operate the house I currently own while living in a different residence.

Since I live on the property right now, it has been very easy to keep things clean, organized, monitored. When I move out, this will be more difficult but I foresee myself visiting the property every other month or so and coming up with creative ideas to keep things stable. Aside from the obvious advantages/disadvantages of being there vs. being somewhere else, has anyone else experienced this scenario? Did you continue to rent by the room? What are some issues I'm overlooking? How can I deal with common areas and rules if I'm not there but less than an hour away (asides from lease addendums with rules described). Part of me thinks it could work out well but the other side of me thinks it could be a horrible experience (concerned with tenant to tenant issues). If anyone has advice or personal experience phasing from a SFH, rent by the room, house hack scenario into a next step would be greatly appreciated!

I love this community thanks in advance!

[Cherie Orellana]

My son has done this. He puts them all on one master lease with rules and their portion of the rent in which they owe on an addendum. He is no longer living there and it is still rented by the room. He only does month to month leases in case there is ever a scenario that room mates do not get along he can give notice or a tenant can give notice if they wish. That has only happened once. 

I would leave it up to the tenants to agree on a laundry schedule and just keeping their own areas clean and cleaning up after themselves. If someone ever complains and you pointed out to the tenant whatever the problem may be, it can usually be resolved easily.  

I would add to your lease things like no excessive overnight guests, parties, if they drink alcohol On occasion to keep it in their own area and not common area and not to do it around others. 

I think for the most part they can work it out among each other. You may get the occasional complaint once every few months and you just reach out to clarify to make sure everyone is on the same page. 

If this is working for you, I personally would continue to do it.   especially since it’s already occupied other than your own room.    The other option may be to sell it and purchase an investment that still cash flows well. One that you would not have to rent by the room.