@Erin Spradlin and I helped some clients buy this Park Hill home in Denver in spring of 2018. The goal was two-fold: 1. find a good home with good schools near enough to the city center and hopefully walking distance to things to do. 2. find a home with an income suite (basement apartment, mother-in-law suite, etc.)

It's basically house hacking with more privacy and no goal of moving on to the next. This was a forever home (or at least a next-5-years-home). Because half the goal was to find a good home, completely covering the mortgage was not mandatory. Simply getting some mortgage offset was intriguing to them.

THE HOUSE

An 1800sf, 3br/2ba SFH with a basement apartment with separate entrance. (900sf, 2br/1ba upstairs. 900sf, 1br/1ba downstairs.)

The home check all the boxes they were looking for. (Photos are at the bottom.)

HOW DID WE FIND THE DEAL?

The MLS. We have searches set up that find properties with income suites.

THE NEGOTIATION

The middle of 2018 was a hot time in the Denver market (as it was in Colorado Springs). This was a well-maintained corner-lot home in a good school district within walking distance to an ice cream shop, a brewery and a cafe. It had a basement apartment. It was multiple-offer situation.

Erin used an escalation clause in the contract to put her clients in the best situation to get the home but not overpay. (Quick side note: An escalation clause is where you say, "We're offering X amount but are willing to pay Y amount more than the highest offer up to a maximum of Z.") In the end, the clients got the house for $5,000 over ask, which was significantly less than the maximum they were willing to pay.

THE NUMBERS

Purchase price: $554,000

PITI (principal, interest, taxes & insurance): ~ $2,900

Rents: between $1,450 and $1,900. They ran the basement apartment as a short-term rental on Airbnb for five months. They averaged $1,900/mo during that time. Now they rent it as a medium-term furnished rental for $1,450, which in my book is better. Sure, it's slightly less money, but the reduction in work is enormous.

CONSIDERATIONS

Anyone wanting to house hack with Airbnb needs to be aware of the laws surrounding short-term rentals. Denver is about to pass new laws, for instance, further defining the primary residence rule. And Colorado Springs just passed an ordinance severely restricting their short-term rentals.

Currently -- and likely going forward -- this style of Airbnb is totally allowed. Basically, as long as you live in the house, you can rent out a portion of it on Airbnb.

PICTURES