Renters in the same house.

Renters in the same house.

Ogden, UT · Member since 2016 · 5 posts · 0 votes

I have a potential house that I'm very interested in investing in.  I want to house hack it, and live in the basement while the renters would live upstairs.  I've done something similar before with friends (they lived in my basement and we shared a kitchen) but never with just run of the mill renters.  The basement in this new house has a 80% finished kitchen that could easily be completed so that really the only thing I would share with the renters would be the laundry room and access to the garage.  Otherwise we would live separately.  Is it a bad idea to have renters in your home when you're not actually completely separated from them?

Also, the cost of average rent for 3 bedrooms in that neighborhood is such that it would cover 90% of the mortgage. I would cover the extra cost of mortgage as well as maintenance and HOA fees ($160).

Also, there would be no separate metering, so that's something that would have to be managed as well.  

Does this sound like a good idea, or with house hacking is it really a better idea to have complete separation of owner and renter?

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  • Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Many SFHs have a separate apartment in the basement with a shared laundry area. You will need to insure that the basement apartment is legal and up to code. If it is not you will not be able to get insurance coverage.

    Contact the building inspector to confirm.

  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    There's no good answer to this question, as it depends on you. Assuming it's legal in this house, whether or not you want to live with your tenants depends on you and your tenants. You should rent "Pacific Heights". 

    Personally, I would never do it, but lots of people do it successfully.

    Skyline Properties
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  • Penny ClarkPro Member
    Sacramento, CA · Member since 2014 · 513 posts · 319 votes
    10y

    @Mitchell Standing, my nephew is doing just this with a condo in Arizona. It depends on how well you screen your tenants. As long as you treat it as a business relationship, it can work.

  • San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    10y

    Basically, you'd have roommates.  And I think you should look into finding what a tenant would pay for a roommate situation with 3 bedrooms that they can rent.  I have a hard time imagining a family who would be looking for 3 bedrooms, would pay the same rent for a roommate situation with their landlord living in the basement.

    On the other hand, why not just get a bunch of roommates and rent out the three bedrooms separately?  You'd probably make more money that way, too.  And if you lose one roommate, you'd still have two paying rent while you replace the one.

    Do you have a local hospital?  Maybe rent to traveling nurses?  Become a crash pad for airline workers?  Have a law or medical school nearby?  They're great tenants.  My favorite tenants were law students and they'd be happy to rent a quiet room in a quiet house.  I heard medical students are the same way.  International students are great - quiet and just study all the time.

    AirBnB?

  • Ogden, UT · Member since 2016 · 5 posts · 0 votes
    10y

    Excellent!  Thank you for the responses.  I guess your right about having to look at it more as roommates type of a situation.  I have also considered air B&B.  My current house has a basement that is being unused and I've wanted to make it into and air B&B. 

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