Rent by the Room in Colorado Springs

[Chris Abislaiman]

Has anyone had any success in establishing a rent by the room model in SFH in the Colorado Springs area? If so, did you hire a property manager? What measures did you take to mitigate conflict in the house? It seems to me that if running smoothly, a rent by the room business is unbeatable. Thanks!

[Daniel Haberkost]

Originally posted by @Chris Abislaiman:

Has anyone had any success in establishing a rent by the room model in SFH in the Colorado Springs area? If so, did you hire a property manager? What measures did you take to mitigate conflict in the house? It seems to me that if running smoothly, a rent by the room business is unbeatable. Thanks!

Hi Chris, I rent my primary residence by the room and intend to duplicate the model here soon with another house. My other rentals are leased traditionally but I've talked to a number of people who are successfully renting by the room (without occupying the home themselves) in Denver so there's no reason it can't be done here. 

In my primary, the key is establishing standards upfront, screening the tenants thoroughly and finding people who are busy. Nobody is home much during the day, it's really just a place for them to sleep. Plus, everyone's schedule is different so there's no conflict with using the common areas (mainly the kitchen) as everyone gets up/gets home at a different time.  

Are you already renting by the room in a primary house hack? Or looking to jump immediately into room by room rentals without occupying the property? 

Dan 

[Chris Abislaiman]

@Daniel Haberkost

Hi Dan,

Thanks for responding! I currently own a 4 Bed 3.5 bath that I’ll be renting out (and moving out of) in February. I might cash flow $100-200 if rented the whole unit, but likely much more if by the room.

Do you manage your properties yourself? What sort of systems and/or screening criteria have you used for the rent-by-the-room model?

Thanks

[Daniel Haberkost]

@Chris Abislaiman

Yes I self manage and I run a background check, call their last two landlords and verify their income/call their boss.

I’m also very upfront with my standards as far as keeping the common areas clean, not making noise at night l, etc.

What part of town is your house on?

[Chris Abislaiman]

@Daniel Haberkost

The SFH is in the Security-Widefield area. The appreciation on it has been nice this year, despite the COVID uncertainty.

I'm planning on buying a multi-family in the spring and house-hacking in that. Judging from your post history, would you recommend buying another SFH and house-hacking that instead?

[Daniel Haberkost]

Originally posted by @Chris Abislaiman:

@Daniel Haberkost

The SFH is in the Security-Widefield area. The appreciation on it has been nice this year, despite the COVID uncertainty.

I'm planning on buying a multi-family in the spring and house-hacking in that. Judging from your post history, would you recommend buying another SFH and house-hacking that instead?

Would that be 80911? That was the hottest zip code in the country a month or two ago so I can imagine. 

From a long term buy/hold perspective, I would think multi family makes more sense. You could buy a small multi, rent out the other units and rent out the extra room in your unit if you want to get as much out of the asset as possible right now. 

Dan
 

[Dan Logar]

Hey there! I actually have been recently thinking about a similar concept of investing in SFH here in the springs with the intention of renting by the room, as I like the downside protection it brings in these uncertain times (since there seems to always be a demand for a $600 room here in Colorado) as well as the huge cashflow potential they have as well. I'm in the middle of building an ADU on a property downtown but was looking at this as a next potential move, as I think it is an area of opportunity here that isn't so overcrowded with competition like a lot of the smaller multi-family properties.

The one concern I had with our market in particular was zoning laws and how renting by the room would fit compliance wise to operate the most efficiently and give the tenants the best experience as well. I may be paranoid after having gone through so much administrative hoops for the ADU, but didn't know what anyone either of your thoughts were on this? I watched one of the more recent podcasts for "Best Deal Ever" on the biggerpockets youtube channel recently that gave me a ton of good ideas on how to make a SFH essentially a "mini multi-family", but obviously concerned that doing renovations that are outside of scope of your zoning could put you in a bind pretty quick legally I assume for a non-approved use.