What should I do until closing?

Question

Hello BP team, a new house hacker here.

I'm currently under contract for my first-ever primary townhome, which features 3 beds/3 bath. My plan is to rent out two of the rooms to help cover my mortgage payments.

So far, the property appraisal has been completed, and I've set up home insurance. I'm considering furnishing every room to make the transition easier for tenants and to avoid potential damage during moves, especially considering the property's multiple stairs.

However, since I don't yet have access to the property, there are limitations on what I can do. I can't order furniture, set up moving dates, or advertise for roommates.

I'm also undecided on whether I should pursue STR/MTR/LTR options. (5 minutes away from groceries, 15 min drive to DT Seattle, <30min bus to DT Seattle)

Do you have any advice on what steps I should take leading up to the closing date, which is just 2 weeks away?

Thank you

Glen Wiley · Answer

Spend the time researching your market, go visit other landlords properties to see what they are offering and better understand how they structure their leases.

At this stage you should already KNOW whether STR/MTR/LTR is the plan. You need to get your plan down in detail. Before you close you should already know what you are doing next.

Michael Haas · Answer

Hey @Haley Jang - I agree with a lot of the posts here. Sometimes it can be difficult to get access to the property between contract & closing - the WA State contracts only guarantee you one walkthrough before closing :/. Feel free to get with @Eric Yu & I if you have more questions that aren't answered by the post, and congrats again on your House Hack!

Ryan Thomson · Answer

@Haley Jang I would connect with @Michael Haas and his team in Seattle and then use them for the next house hack. They would have walked you through this already and helped you think through what strategy is best for your situation.

Which rental strategy to implement  comes down to your goals and how much time you want to spend managing properties.

In Colorado Springs, STR will certainly get you more income than a LTR but its often more time-consuming to manage as you have new people in your home every couple weeks. No right answer for everyone, it depends on how much time you have and how much rental income you are trying to make.

Wale Lawal · Answer

@Haley Jang

Congratulations on your upcoming house hacking venture! Here are some steps and considerations leading up to your closing date:1. Finalize Your Financing: Ensure that your financing is in order and any required documents are submitted promptly to avoid delays.2. Prepare for Move-In: Coordinate with the seller or their agent to get access to the property as soon as possible after closing. Schedule any necessary utility transfers or installations for the move-in.3. Furnishing Decisions: Consider purchasing essential furniture and appliances for common areas and shared spaces. Focus on items that enhance the living experience for both you and your future tenants.4. Lease Agreement: Begin drafting a comprehensive lease agreement outlining the terms and conditions of the rental arrangement. Decide on the type of rental (long-term, short-term, etc.) and the rental rates for each room.5. Insurance and Legal Considerations: Update or purchase landlord insurance to protect your property and investment. Familiarize yourself with local landlord-tenant laws to ensure compliance in your lease agreement.6. Property Management: If you plan to self-manage the property, set up a system for rent collection, maintenance requests, and communication with tenants. Alternatively, consider hiring a property management company to handle these responsibilities.Remember that effective planning and communication are crucial for a successful house hacking experience.

Best of luck with your closing and your new venture into real estate!

Justin Brown · Answer

Hey Haley it is great to see you are taking action and pursuing getting your first house hack. I am also trying to get my first house hack to, so hearing that you are able to do this gives me the confidence to do it also when I am ready.

As far as when you said that you are going to furnish the tenants rooms I would only be doing that if I was going to STR it because for LTR tenants always bring their own furniture for their own room. I get how you are looking after them so they don't have to carry heavy furniture upstairs to their room but for example if you get an apartment, the apartment complex is not going to supply you with furniture because even though you might have to carry that furniture upstairs it is still understood that you would be bringing your own furniture. However though for a STR and depending on the MTR, then you should supply furniture for the tenants rooms.

Also, I would say that I am kind of in agreement with everyone responding to your post that you should already know by now since you are closing if you want to rent it out as a LTR, MTR, or STR. Good luck with everything I know you will succeed. Also check your inbox, because I am sending you a message shortly about connecting and talking about house hacking since I am trying to go down that path to.

Ryan Thomson · Answer

Hey Haley! I would use the listing photos and set up an add to find tenants. See if you can't get people interested in moving in the day you close. Your realtor should be able to get you in to show the property. Maybe stack as many people in a one hour showing window as possible. I did this for my first house hack in Colorado Springs and it worked great.

Derek Brickley · Answer

Definitely agree with Glen, focus on your strategy and narrow down the final details.  Although you can't actually get into the property yet, you should know exactly what you will be doing when you can.

Benjamin Sulka · Answer

Haley,

There's some fantastic insight above.

I don't have anything to add other than congrats on taking action and securing your property! I'm getting my first house hack this summer.

We should connect!

Bonnie Low · Answer

Since you are undecided about STR, MTR or LTR I recommend you start immediately by finding out which of these is allowed in your town AND within the property itself if you're in an HOA. You can't move forward on ANY strategy until you know what regulations are going to apply to your property. This should help you narrow down your options. Then do your market research. This will further help you decide which direction to go. Once you've establish that, there are a few things you can do.

For any of these strategies, decide whether you're going to self-manage or pay a property manager. If you're self-managing, start determining what systems you're going to use. You'll need to know how you're finding tenants and doing the background check, what process you're using to collect deposits and rents and what you're using to create your lease agreement. If you're using a property manager, I'd start interviewing companies now.

As for ordering furniture, unless the property is currently occupied, your Realtor may be able to help you get access so you can take measurements and start planning. There's a lot to be gained by selecting your items and putting them in your shopping cart (online) but not yet checking out so that you're ready to pull the trigger once you've closed, especially if you're doing MTR or LTR. In either scenario, you'll be surprised by just how many decisions you have to make and if you're like most people, you can easily get overwhelmed and suffer decision fatigue so getting started early can be a very smart decision.

Hope this helps and good luck to you!

Rick Albert · Answer

It all comes down to the comps. Take a look at the competition for each category and go from there.

In terms of ordering furniture, etc., most do wait until after closing. If you ask nicely MAYBE you can ask the Sellers if furniture can arrive and be put into the garage. I would only ask this assuming all contingencies have been released. Personally as a Seller I wouldn't do it, but some people are nicer than me.

I noticed when I rented out my ADU, I had it partially furnished (since I lived there before and the furniture was for that space anyways). I didn't charge more for it (because it saved me time and effort of dealing with it) but in exchange if anything ever broke I wouldn't deal with it. People responded well to it.

What should I do until closing?

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