Rent by Room Cost in Denver

[Anastasia Bourdon]

Hi All,

I'd really love some advice on pricing the rooms out in the home I am closing on next week in Harvey Park South. Its a 3bd/2bath 2000sqft home with a nice yard, corner lot, hardwood floors, and lots of natural light. I will be living in the basement and renting the top level (2bd / 1bath). I had two friends lined up to move in, and the week before closing they are haggling on the price, which was already agreed on. I was going to charge $800+utl for the larger bd (13x10) and $750+utl for the smaller bd (9x12). Basically, they have their own living room to share too since I'll be living downstairs with my own living room. It doesn't seem like this price is out of line with this market, but wanted to get some sage advice.

[Greg Weik]

Hey @Anastasia Bourdon, I own a property management company and we just started managing house hack properties.  One of my employees also "hacks" his own house and has for a couple of years now.  It's an interesting world, to say the least. 

On price:  It sounds like you're pretty close to market value for how you've described the home.  I highly recommend you do not split out utilities, internet, etc.  The logistical application of this can be a legal nightmare for you if you ever have to evict.  Accepting rent with a known violation (like non-payment of utilities) could waive your right to enforce.  I've been at this for a long time (and went to law school) and I can tell you with certainty that your best bet is to have an inclusive rent price and leave it at that.  

On tenants: The biggest differences I've noticed on the HH properties is that the tenants are flaky and usually less-qualified.  We've had multiple tenants say they are moving forward on a property only to disappear into thin air.  Believe it or not, this is pretty uncommon in our world with about 500 doors under management.  Prospective tenants for HH properties seem more inclined to post selfies on FB groups and saying "contact me if you have a room" vs. seeking out a good room for rent.  So the dynamic is completely switched from what we are accustomed to.  I think this is fine for an owner-occupied situation where you can scour FB groups to find a good fit for your property (it's difficult for us due to scalability with this approach.)

I would highly recommend doing a thorough background and credit check on anyone you are leasing to.  Make sure you have a good lease in place.  I also suggest individual digital door locks for each bedroom (where you, as the landlord, retains the master key) for added security.  Make sure you have solid "house rules" that everyone signs off on.