Littleton basement rental house hack

[Trace Adams]

Hi all,

I am currently under contract on a 4 bed 3 bath SFH in the Littleton area (Bowles and Wadsworth to be exact). There are 2 beds/2 baths/1 living room upstairs, and 2 beds/2 bath/1 living room down stairs in the fully finished basement with a separate walkout entrance. I plan to rent out the basement but have a couple of questions as this is my first house/house hack:

-Littleton rental law considerations (this might fall under JeffCo rather than city of Littleton, can't really tell)

-Thoughts on best lease strategy for that area (STR/MTR/LTR)? Thinking STR may be good given proximity to Red Rocks, although not sure of STR laws per above?

-Thinking about the long term, if I were to move out could I turn it into a duplex and rent out upstairs and basement separately? FYI, the house is in a PD (planned development) district

-Regarding homeowners insurance - do I need a special policy or add on to standard policy? Should I tell my insurance that I'm renting out basement?

-220v oven in basement or just a 110v cooktop?

Thanks all for your help! 

[Todd Norton]

Generally it's based on the city, but you'll want to check both city and county. For example, Denver allows STR w/ license if it's your full-time residence but if you plan to move out the STR ability disappears, has to be your full time residence (last time I checked). And anything over 31 (some cities do 30 so verify) days is considered MTR and typically has less regulations. - Short-Term Rental (STR) License - Littleton CO - The shorter the stay, normally the higher the revenue but also higher work with turnover, etc.

You'll also want to check zoning laws to see if you can legally have it be a duplex if you move out. The district and any HOA will have a say in this too.

Yes, you'll absolutely want above and beyond insurance.  Just in case but definitely worth it IMO.

If you separate the living areas with a wall and add in a 220v oven, this will be a red flag for assessors and inspectors that you're running a true duplex instead of just renting out the basement.  I've seen folks get around this by removing the oven if/when you get either of those scheduled.  

Hope this helps get you started!

[Anthony Swain]

Hey @Trace Adams,

Congrats on being under contract. Hopefully it goes as planned for you!

I'd definitely double check and triple check your local/city regulations in regards to rentals, so there are no surprises as to what you can do legally. 

Off the cuff, I think an STR would do well being close to Red Rocks, but I don't know the # properties available in the area.

Converting into a duplex could be a good idea after you move out, but once again, I would double check and triple check zoning ordinances and codes to be compliant. 

Lastly, 100% let your insurance know your intentions. You don't want to be in a position where something happens and then they deny coverage due to undisclosed use of property. 

Good luck Trace!

-Ant

[Bill S.]

@Trace Adams so IMO you have the cart before the horse. You should KNOW the rental laws before you even look for a property to purchase with the intent of renting it out. 

Typically the local municipality supersedes the county regs. That is if the property is with the City of Littleton then Littleton rental laws apply. If it is in unincorporated Jeffco then Jeffco rules apply. It's a really big difference too. 

In all likelihood you cannot "turn it into a duplex". Zoning laws typically want to keep single family neighborhoods as single family neighborhoods. Some areas allow ADUs if you live in the property so what works now may not be legal if you move out. 

All electrical work requires a permit. If you add a 220 outlet for stove/range then it requires a permit. The permit for 2nd range (220 outlet) at a property may be turned down if the property is not zoned for two units.