House Hacking in the Basement of a SFH Townhouse

[Kristin Caras]

Hey everyone, hoping to gather some opinions on a potential rental property/house hack. I got a heads up from my agent that she has a property about to come on the market that is a SFH townhouse in a community that I've been interested in and has quite a few nice rentals in the neighborhood.

It is an end unit townhouse with a separate entrance to the finished basement that has a full bath. I would like to live in this basement “unit” for a bit while saving for another property and rent out the main townhouse upstairs, minus the basement.

Has anyone done anything similar? My main concern is if I would need a zoning change if I am renting to tenants and living there at the same time. However, I think this would be OK being that as the owner I would be the one in the basement and not renting it on two separate leases to two different groups of people if that makes sense. When I move out of this basement unit I would keep it as one unit, SFH rental.

(Just as an aside, I have definitely looked for true multi family homes, but there is a very limited supply in my area. I am continuing the search but am interested in making this property work as well. I’ve been in quite a few of these townhouse properties in this community and the basement is actually a good bit of space and when totally finished looks just like part of the main house, especially with its own entrance.)

Thanks in advance!

[Warren Swede]

My current business partner is in a similar arrangement right now, its called house hacking.  He is living in a townhouse and rents out two other rooms while living in the basement with a separate entrance.  I am not sure about your specific state, but in Virginia he did not have any issues with zoning.  The only thing I think he was required to do was be an owner occupant for at least one year before he sold it, but that may have been something specific to his mortgage.  Best of luck!