Has anyone found success House Hacking in Chicago/suburbs?

Question

I like the idea of house hacking/renting by the room for my first deal and was wondering if anyone on here has had success with it in Chicago or any surrounding suburbs. Im slightly worried that I'll have trouble finding a group of strangers that want to live together. If you have had success with it, what is your price point and what have you been able to charge per room?

Michael K. · Answer

I've done it and I didn't find it to be too difficult. It's easy to find young people in college or recently graduated that can't afford a place all on their own but still need somewhere to live. It's great if you have friends or acquaintances that are willing to live with you but strangers are ok too. I like to check their online presence, Facebook, Linkedin, Instagram, etc to get a feel for their personalities. Also, know that if you are renting out an extra room in your own unit you can be pickier about who you choose, not like a typical rental where you can easily be accused of discrimination, if you get a weird feeling about someone then don't give them the spot, you don't have to rent to the first person that comes along.

Henry Lazerow · Answer

I have house hacked a 4 unit in Edgewater for the last 3 years. I have had a few clients do the roommate thing and it's worked OK but is definitely a compromise of lifestyle quality. The traditional way is buy a multi unit and live in the cheaper unit while renting the rest. Feel free to shoot me a PM to chat more.

Garfield M. · Answer

I did this with a condo in the city. I think you'll have more consistent clientele for rent by the room in the city. Condos could be your best bet with similar purchase price as single family in suburbs.

Regardless of where, you want to have at least two bathrooms and maybe 3-4 bedrooms. This will most likely make it work financially. Having 2 bathrooms makes it much easier, ie at busy work times etc. I had a 3 bed 2 bath condo where i put up a wall and made a 4th bedroom and was charging $500 per room and this was back in 2014 so you could maybe do more now. I also did airbnb in the rooms when I had the time.

The good thing about suburbs is you can rent by the room on airbnb, just be sure to check legality of airbnb in your suburb. That could make it work out for you. It can be a pain in the ass living with others but can always put an e-lock on bedroom doors for safety.

If you're looking to just get started with the lowest purchase price possible then it's a great starting point. I did it for a few years and it definitely paid off. This is what helped me pay off student loans and a car loan using that exact method. If you get yourself a 5 year plan, the immediate annoyance of renting out rooms in your home becomes more worthwhile and puts it into perspective about where you want to be long term.

if you're in the suburbs, I'd prefer somewhere near a university or something like that. Or a teaching hospital. Something that gives people a reason to want to rent a room on a  temporary basis. Screen any tenants thoroughly.

Good luck, i hope it works out for you

Kyle S. · Answer

I rented a big place in Chicago (Wrigleyville) in my late 20's that was rented by the room. One of my big mistakes was not trying to buy the place. The upper unit had 5 bedrooms and the downstairs unit had 4 bedrooms. The owner was making a killing on it. But it worked out well. To start it was all friends but towards the end we got roommates off of Craigslist and that worked out great too. Get to know the person from Craigslist a bit before you let them move in. We took them out to drink and hung out with them to get to know them a bit. We had 4 people we found on Craigslist and they all worked out great.

Paul De Luca · Answer

@Jacob Wohlgemuth

Yes, I've done two house hacks in Berwyn although I rented by unit rather than by room. I would recommend browsing listings online to see what people are charging per room. For the right price, I'm sure it wouldn't be that difficult to find people willing to rent a room depending on the length of their stay.

Forrest Williams · Answer

Hey! I got my start house hacking in the burbs, and it is a great way to learn skills. There are a couple different strategies for house hacking. One is to get and flip a single family home and rent out the rooms. Use airbnb, craigslist, or facebook. You gotta make your own group of strangers that way. Check what similar units in your area are offering, and price your room accordingly. Be upfront that it's a private room in a shared residence.

If you can get a multi unit building, you may have more luck (and better returns). It can be easier to find tenants that way, since they know they'll have some privacy. Multi family buildings tend to be more expensive, but you can get higher rents and vacancy is less of an issue. Chicago is a great area to house hack in. Go for it!

Victor So · Answer

@Jacob Wohlgemuth yup! I househacked in Niles and consistently got $700 per room through FB marketplace, roomies, and other sites. If you Airbnb your rooms, you’ll make more. I still househack after year 5.

Eudith Vacio · Answer

Hey Jacob! I have only found 1 person that rented out bedrooms successfully but they somehow all new each other, she rented each room for $500 and they shared the kitchen. I think it can be a bit difficult to rent by the bedroom and might be easier to just rent out to long-term tenants. Where in the suburbs were you trying to look?

Jonathan Klemm · Answer

Hey @Jacob Wohlgemuth - I think you will find that most of the Chicago folks on forums started our house hacking or are still house hacking.

I personally do not think there is a better way to get started.  It is the least expensive and frictionless process to become a real estate investor.  My current building where I live in Logan Square is still technically a house hack except I am using the lower unit as a short-term rental instead of a long term.  Happy to connect to talk through your plan.

John Warren · Answer

@Jacob Wohlgemuth the suburbs right outside of Chicago are fantastic for house hackers as there are lots of 2–4-unit buildings. I tried to house hack early on, but I had kids already, so my wife and I ended up doing a live in flip instead. I have helped quite a few people buy house hacks though, and it is a relatively straightforward process.

The rent by the room thing is a strategy that one of my investors tried not too long ago. It was surprisingly hard to do with strangers. The property was in Berwyn and had individual bedrooms with their own locks for some additional privacy/security. He ended up pivoting to traditional rentals pretty fast. I feel like you will have better luck if you have a buddy who wants to do this going in or something like that.

Has anyone found success House Hacking in Chicago/suburbs?

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