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Updated about 5 years ago,
Extreme House Hacking with 10+ Roommates?
Hello everyone. I'm not old enough to invest in real estate yet, but I plan on house hacking for my first purchase. I have been looking into the idea of "coliving" which basically means dorms for adults. In places like San Francisco and Los Angeles, you can rent out a bunk bed for $50 a night ($1500 a month!). As absurd as this sounds, I have been thinking about how it would work in my local market (Loveland, CO).
Here's how it would work:
I would set up as many bunk beds in each room as possible. For normal bedrooms, I would probably set up two, and for master bedrooms, I would set up around three. I would leave the living room and kitchen open as a shared space, but would put place bunk beds in the family room(s), office, and basement.
Now my market isn't anywhere near as expensive as San Francisco, but I think it might still work. The average rent for a small apartment in Loveland is $1400, but I would only charge $450.
My goal would be to have around 10 beds in total. Full occupancy would be 19 (not including myself). A conservative 70% occupancy rate would be 13.
13 x 450 = 5850 a month
Mortgage Principal and Interest = 1280
Property Taxes = 200
Home Insurance = 120
Utilities = 500
CapEx/Maintenance = 500
Total Expenses = 2600
Profit = 3250
3250 x 12 mo = 39000
I'm basing these numbers, in part, off of a property that I saw on Zillow, but if I were to use this strategy, I would still try to find a property below market value, possibly off of the MLS. Ideally I would be able to force appreciation through repairs.
I'm curious as to your guys' thoughts on this. Most of the people that I have talked to have said this is a crazy idea. I realize that many of those looking for a place would not be willing to live with this many people, but I know the price would be worth it for some. If I could get 90% occupancy, I would get 7650 before expenses (91800 a year).