I want to highlight the success story of a fellow house hacker I connected with last year, Vance Payne. What I love about his story is that he was able to get creative and find a contractor to add a kitchen in the basement in order to maximize rental income as a short-term-rental.

Investment Info:

Single Family Home with 4 beds and 3 baths in Westminster CO. Original plan was to renovate and rent out the basement as a separate unit. Pivoted to a short term rental in the basement for the additional income.

Purchase Price:

$430,000

Cash Invested:

$21,500 down, roughly $6000 in closing costs, around $30,000 in renovations and furnishing

What made me interested?

I started listening to the bigger pockets podcast around the end of 2018 while still in college. I immediately became interested in real estate. I then learned about house hacking and knew I wanted to have a house hack. After starting my career and getting married we decided to get our first property and a house hack was an easy choice. We decided to go with an airBnB rental for the basement to allow for more cash flow and some more flexibility with who uses the basement and when.

How did we find the deal?

We found the deal through the MLS and working with our amazing agent Lauren Valinoti. We had several offers turned down before this property. We offered at asking price and ended up negotiating a small seller concession due to some repairs we had to do. Other than that, we had a smooth closing.

How did we finance the deal?

We used a conventional loan with 5% down. This came with PMI which we chose to pay monthly rather than upfront.

Did we add value?

We added value by updating the basement with a kitchen, egress window, new lighting and flooring. We also put in a wall to separate the upstairs (our current unit) from the downstairs. The only shared portion is the front entryway. We also added a washer and dryer to the upstairs unit so both units have laundry. We still have some more minor work to do on the upstairs unit as well.

What was the outcome?

The outcome was that we listed the unit on airBnB in September of 2021 and have had a successful rental with around 75% occupancy so far. We still have some kinks to work out like finding a new cleaner but it is running well.

One lesson we learned is to get contractors started as soon as possible. Just about every aspect of our renovations have taken longer than expected and cost more. We definitely will have more of a cash buffer when planning to do a major project like this in the future.