All Forum Posts by: Samuel Ace

Your biggest issue with 5 bedrooms is that 50% of your income is going towards the mortgage, I do not believe banks would even lend to you with a DTI above 40-45 (mortgage + other debts). You should make sure that in the worst case scenario (no rooms rented out), that you will be able to afford the mortgage.

Even though it's unlikely all the rooms will be vacant, its equally unlikely that all rooms will be rented out for a long time, room renters tend to move around a lot so you still want to make sure you're prepared for the vacancy, as Koren mentioned above expect leases under 12 months. 
 

Make sure you screen your tenant's good, and that you get along with them as they will be living with you.

 Room rentals are more common than you would think in HCOL cities, the living in the trailer part is not something I personally would do nor do I think its the best idea, but buying a house and renting out rooms to people works out better than you would think and is a great way to get your foot in the door with real estate. Most people need to start somewhere and IMO it's a great way, it's how I started out 7 years ago, with my first and now I am able to own multiple properties. 

Keep in mind if OP does not buy a house he would still most likely be renting an apartment, and probably be paying 2k+ in rent. So as long as he has 2 rooms rented out it would still most likely be better than renting an apartment.

My personal advice is to not live in a trailer and go with maybe the 4 bedroom house.

Volunteer with habitat for humanity they teach you how to fix up houses, its how I learned!

Do you have friends you can rent to? I was in a similar situation when I first started ( mortgage was a large chunk of my salary) Thankfully I had friends that I was able to rent to that basically paid my mortgage and eventually my income increased enough where it was not an issue.

what area of Denver are you looking at? some areas room rentals are easier than others. 

Its a good time to buy as long as you:

1. You buy in a desirable area, with population growth.

2. Screen tenants properly or pay a good PM to do it for you

3. Hold for 20 years +

you do the above its basically impossible to make a bad investment 

Today it would be hard to say but location wise maybe C, inventory wise B-D. The D properties get bought up quickly and flipped, this area has the most house flips in the Denver metro  House Flip Map 

the whole west side of Denver (west of I-25) used to be considered "D" about 30-40 years ago. Starting in Highlands neighborhood (or northside) which used to be a very rough part of town, is now the one of the top 3 most desirable are in the metro and this has slowly trickled down into neighborhoods south.

I am an engineer so I love to base my decisions on data, so for example looking at census data, I like to look at % of high income earners in an area to gauge if I should invest or not

For 80204 which includes the neighborhood of Villa Park, in 2010 the % considered upper middle/high income was 4.2% of households. 2022 census says that now it is 40.5%

On the other end is 80219 which includes the neighborhood Westwood which would have the lowest income area on my list, in 2010 Westwood had 4% as well, by 2022 it had 21.1% high /upper middle income earners.

I have properties in both and tenant applicants are a wide variety (lower income folks on rental assistance to high income earnings wanting to rent in an area before buying a home) so its hard to put a property class in this area. 

Property appreciation in these areas have outperformed Denver's for the last 10 years, and is the last area of affordable houses. 

The whole area was neglected in the past but is having an insane about of public development that I fail to see how it wouldn't continue (near one river north development, mile high station redevelopment, federal blvd greenway, federal blvd BRT, Morrison Road redevelopment, just to name a few). 

sorry for the long post I kinda just spilled out my whole thoughts on the area..

80204, 80223, northern part of 80219. Currently lower income, but lots of development going on here public and private

 Crazy reading this in 2024.. bought my first rental in 2017 and have heard about the great “correction” every year since then. 

Denver is still undervalued relative to similar cities and how unique it is with the mountains.