We have published an updated and detailed guide to house hacking in Denver. The content below is good, but is outdated. Check the new post for the most up to date info.

House hacking has become a popular, unconventional real estate investing technique. Conventional real estate investing is where you buy a place and rent it out. House hacking is where you buy a primary residence, live at the property, and rent out part of it to tenants. It’s a great way to get into real estate investing. But, it’s not for everyone.

Here are common house hacking examples around Denver:

About the House Hacking Denver

house hacking denver

For the majority of want-to-be house hackers, buying their house hack is not only their first investment but also their first property. It can be intimidating and overwhelming. The best cure is to educate yourself and learn from people with experience. That’s exactly why we’ve put together the Denver House Hacking guide. It’s a compilation of input and advice from these investors and real estate professionals from around Denver:

Have a question about house hacking Denver? Then ask! All of us are more than happy to answer your questions. You can leave a comment on this blog post or reach out to us individually.

Resource: In addition to reading the House Hacking Denver guide, you can also listen to our house hacking podcast where each expert is interviewed. If you’re serious about house hacking, then definitely check it out!

House Hacking in Denver is a Balancing Act

There is no best way to house hack. Please don’t try to create the perfect plan or exactly copy what others have done. You’re balancing real estate investing and your personal living situation especially for house hacking in Denver. Finding a return that you’re happy with and a living situation that you’re happy with requires a balancing act. You’ll more than likely have to compromise on both.

Use investment spreadsheets to help analyze deals, but realize that the numbers are only 50% of the equation. The remaining 50% is your living situation, which is very hard to plug into a spreadsheet calculator!

As you read this guide, keep an open mind, write down questions and talk to as many people with experience as possible to help you create your plan.

How Much Money Can You Make House Hacking?

Well, it depends on your balancing act! The general rule of thumb is that the nicer the place and the better location of your Denver house hack, the less cash flow that you will make. Why? People buying a house to live in, typically are more willing to pay a higher premium, than renters are willing to spend on rent.

Subsidized Living or Living For Free? Since this is a house hack, you’re living at the property. Depending on a number of factors, you may be living for free (rental income covers all the expenses and mortgage) or your tenants are subsidizing your living expenses (rental income covers some, not all, of the expenses and mortgage.)

The nicer the area that you’re in, the harder it is to live for free. Again, it comes back to the balancing act of investment returns versus your living situation. If living for free is a requirement, realize that you’re not going to live in the neighborhood that you WANT to live in, rather it’ll be what you NEED to live in.

Using Other Peoples’ Money. Real estate is the best way to build long term wealth. If you’re house hacking, you probably already realize this. Remember, you’re not living in this property for the rest of your life. Whether you’re living for free or subsidized, your tenants are paying down all or the majority of your property. You’re using other peoples’ money to buy you an asset.

In terms of long term wealth building, is a couple hundred dollars a month in cash flow going to make or break your investing plan? Most likely not. Our advice, don’t get tunnel vision of making a certain amount of cash flow per month. Keep it perspective and enjoy using other peoples’ money to pay for your living expenses AND buy you an asset.

You’re Gaining Investing Experience. Gaining experience and increasing your emotional intelligence doesn’t show up on your spreadsheet analysis. Often those qualities have a huge impact on your investing ability and building long term wealth. Once you own your house hack, you’re a landlord and in the real estate investing game. No amount of books, seminars, podcasts, and talking with experts will give you the same education as hands on, real world experience.

Don’t think experience and emotional intelligence are important? Have you ever seen the news headlines about lottery winners winning millions of dollars who are bankrupt two years later? There’s a big difference between earning that money versus waking up with it one day. If you earn it, you’ll also develop the capacity to keep it. There are a lot of similarities to house hacking.

Right now real estate is going great, but what happens when (it will happen at some point) when it goes sideways or declines? How much are experience and a high emotional intelligence worth to you when it can be the determining factor between continued success or losing your portfolio? It’s probably worth a lot more than a few bucks a month in cash flow!

The more experience you develop, the more of a compounding effect it’ll have on your future investments.

Resource: This guide is great, but doesn’t compare to the benefits of attending a local event. Join us for a two hour class on House Hacking Denver (check the calendar for upcoming classes.) It’s a free class where you can ask questions and network with other like minded people.

Favorable Financing For House Hacking Denver

Since you’re living in your house hack, you’re eligible for the incredibly favorable owner-occupied financing options when compared to investment financing. Why? Mr. Homeowner owns a nice house where their spouse, two kids, and dog lives. He also owns a rental property across town. What happens when Mr. Homeowner loses his job and can only afford one mortgage payment? Which one does he stop paying? Of course, it’s the rental property!

Lenders realize this and offer stricter terms to investment loans. The typical investment loan requires 20% down. You can buy a primary residence for 0-5% down. The lower down payment is a significant chunk of cash.

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As you can see, there is a big cash savings advantage to buying a house with favorable owner-occupied financing compared to a non-owner occupied loan. Make sure you discuss the various options available to you with a mortgage professional.

The loan amount you qualify depends on your credit history and income, to name a couple of factors, for buying a primary residence (which includes house hacking… since you’re living there.) Lenders will not consider the potential rental income from your Denver house hack for loan qualifications. You must qualify for the loan based on your income and creditworthiness.

Resource: Joe Massey’s “How to Build a Portfolio of 10 Denver Rental Properties” course walks you through the numbers of leveraging a house hack to build a rental portfolio of 10 properties. Seeing the numbers will get you even more excited about house hacking!

Property Management and Tenant Screening

There’s no way around this, if you’re house hacking, you’re living with your tenants and also a landlord. That idea either excites you or scares you, perhaps both! Regardless, you’ll gain incredibly valuable experience as a landlord because you’ll be one.

Aside from wanting someone that pays rent on time and treats your place well, you probably have an idea of who want living there… and those that you don’t!

In the eyes of the government, you’re a landlord. The government knows the rules, your prospective tenant may know the rules, so you need to know the rules and laws as well. The federal government and state of Colorado have numerous rules and laws to protect tenants and home buyers from being discriminated against.

Here’s a description of the Fair Housing Act from HUD’s website:

“…as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.”

For example, a woman is most likely comfortable with another woman of similar age and interests as her tenant. However, according to the Fair Housing Act text above, that could be considered discrimination based on sex (“No men. Only women.”)

Fortunately, the government understands that there is a difference when the landlord is living with their tenant under the same roof. This is known as Mrs. Murphy’s exemption and won’t apply the same fair housing standards and force the landlord/owner to live with someone that he or she does not want to.

States can modify Mrs. Murphy’s exemption. Colorado exempts landlords from fair housing laws when it’s an owner-occupied single family residence (not duplexes, triplexes, etc.) However, if you’re a practitioner of real estate, own multiple properties, or hire a property management company to find a tenant, then Mrs. Murphy’s exemption does NOT apply. Regardless, you can never advertise with discriminatory language.

Confused? It’s understandable. Many real estate professionals don’t even know these nuances (including some of us until Marc enlightened us!) Don’t let it stop you from house hacking. Just realize you’ll need to do a little extra homework.

Do You Need a Lease?

Do you need a lease to rent out a room or unit? No, you legally do not. However, you don’t need a lease until you need one! Yes, that statement is contradictory. It means you don’t need a written lease agreement when everything is going smoothly. But what happens when it’s not going great? A written lease will answer those questions. If you have ever talked with experienced landlords, then you’ve heard that eventually, something goes wrong! Hope for the best, but plan for the worst.

You’re using house hacking to launch your real estate investment career. So, treat it like a business. No handshake deals, verbal agreements or grabbing freebie leases off the internet.

Resource: Marc Cunningham’s property management company offers free tools and resources for Denver landlords. His resources are a great starting point as you become a landlord.

Long Term vs Short Term (Airbnb) Rentals

With the explosion of Airbnb, you now have more options for generating rental income for your Denver house hack. Is renting out for the long term or short term better? Well, as with most things, it depends!


Long term rental: None.

Airbnb rental: It needs to be fully furnished. Look at Airbnb’s website at places near where you want to house hack to see the quality of the furnishings.

Rental Income

Long term rental: Steady income month to month. Look on Craigslist and Zillow for rent comparables.

Airbnb rental: Typically, Airbnb income is higher than a long term tenant. However, it really depends on how many nights a month it is occupied. You’ll need to actively manage the rent rates. In the beginning, you’ll charge lower rents to get people in your place to leave good reviews, which will then allow you to increase the rent. Location and seasonality play a role as well. Do your homework and look on Airbnb for comparable rents.

How many nights a month can you rent out your place? 2 days a month vs 22 days a month is a big difference. Don’t forget the old landlord adage that if “your occupancy is 100%, it means you’re not charging enough!” Don’t worry about perfection with your rents. Time and experience are the big factors for optimizing your rent.


Expenses are hard to estimate and never a fixed amount each month. Don’t worry about trying to get the perfect estimate, because it’s impossible too.

Long term rental: Many investors estimate 5% to 10% of rent to cover expenses. Another simple rule of thumb is to use one months’ worth of rent. The age and condition of the property are the biggest factors in expenses. Talk with Realtor or property manager for help on specific properties.

Airbnb rental: Your location and class of guests will have a big impact on the expenses. Have a cool pad that is perfect bachelor parties and close to the bars? Well, you’re going to have a lot of wear and tear and items breaking. Most Airbnb hosts supply consumable amenities (toilet paper, shampoo, laundry detergent, coffee, etc). Those items add up! Guests steal things as well. Ask any Airbnb host.

Don’t assume that you can get your Airbnb guests to fix or payback for repairs of theft. Is it worth the time of going through Airbnb’s mediation process or filing an insurance claim?


No matter how your rent your property, a large part in the time spent managing depends on your ability for putting systems and procedures in place for handling issues. Don’t worry about having a perfect process in place before you buy. Managing your time and creating procedures is part of the learning curve. Plus, are you the handyman or hiring someone?

Long term rental: Compared to an Airbnb rental, time invested will be minimal. Keep in mind that you’re only a few feet and door knock away from your tenants.

Airbnb: You’re running a hospitality services business now. It’s a combination of hotel operator and concierge. How much time will you interact with your guests? Some hosts are a super host and enjoy spending time recommending things to do around time. That’s fun, but it takes time.

Are you cleaning the place between guests? Who is scheduling the cleaner? How often are you running to Costco to buy new toilet paper?


Recently Denver passed a short term rental law that bans people renting out their property as a short term rental (30 days or less), unless it’s their primary residence. Since you’re house hacking, this law doesn’t impact you, while you’re living at the property. Once you move out, what does that do your numbers when switching from Airbnb to long term?

Or perhaps, the law is favorable to you since it’s limiting Airbnb competition!

Surrounding areas are keeping an eye on Denver’s new law. Some will most likely follow their lead. However, you really don’t need to worry about it since it’s primary residence. Just make sure you’re good with the long term rental numbers when you move out.

Greatest ROI

You may be asking, “Well, bottom line, which one will make me the most money?” There is no clear-cut answer because it really depends on a number of factors. Typically, Airbnb will generate the greatest amount of income and profit. However, don’t assume that will be the case for your house hack. The location of your property will have a big impact on Airbnb rental income. The majority of Airbnb guests are on vacation want a good location.


Here’s a typical scenario for a married couple: The guy is excited and sold on the concept of house hacking. He’s ready to go! The wife is too until she sees the neighborhood, the condition of the property, and how close your tenants are living to you. In our experience, the wife has vetoed the idea of house hacking more often than not. 

We’re telling you this NOT to scare you away, but to make sure everyone’s expectations are on the same page. When people buy a home, especially their first one, they have a picture painted in their mind of the 3-4 bedroom home in a nice neighborhood. They aren’t dreaming about living in the basement unit while tenants are living in the bigger, nicer space above.

Remember, house hacking is a phenomenal way to get your start in real estate investing, even as prices continue to rise in Denver.

Case Study: A Launching Pad for Investing

Travis Sperr started his real estate investing with a triplex house hack. Charles Roberts interviewed Travis for our podcast. Listen to the full interview for all the details as this section provides a summary.

<<< Podcast coming soon! >>>

Summary of Travis’ house hack:

Take a minute and really absorb those numbers and what Travis and his wife did. Was living in a triplex what they wanted to do? No, but they knew that some short term sacrifice would pay dividends down the road. It absolutely has for them because they are full time real estate investors now in their thirties.

“You’re not going to live in the neighborhood that you WANT to live in, it’ll be what you NEED to live in.” – Travis Sperr

Was one year of sacrifice worth it? ABSOLUTELY! In 2017, Travis did a $30,000 remodel of the property. Now the property is worth over $400,000 and brings in over $5,000/mo of rent.

Are Prices Too High? Miss the Opportunity?

Newspaper headlines love to write sensational headlines about the crazy Denver real estate prices. Yes, when you compare prices today to five years ago, it’s been a very drastic increase. When you drill down into the data and put it into context of the big picture of historical trends, it’s nothing crazy. Actually, a large part of the price increase is a correction from the real estate crash 10 years ago.

A very important point that is often overlooked is that rents have gone up along with prices. From an investing standpoint, the numbers still work.

Resource: Every quarter we do an indepth webinar on Denver’s real estate trends. It’s a deep dive into the data to give you an accurate snapshot of the market. Plus, you’ll see why we’re still investing!

Bottom line, does it still make sense to invest in a house hack? While, we don’t have a crystal ball to predict the future, the short answer is “Yes.” We’re not saying that because we’re selling you real estate. We’re actively buying more real estate. Actions speak louder than words.

Besides, you need a place to live! Might as well have your tenants help pay for your place.

If you’re a true long term investor, the value of your property does not matter. Historically, when property values decline, rents stay relatively stable. That fact should give you peace of mind if you’re worried about prices dropping right after you buy.

Take a step back and put it into perspective for the long term. What if your parents or grandparents (or other relatives in retirement) had purchased one or two rental properties. How different would their retirement be with even one paid off rental property? Probably dramatically different!

Don’t get to focused on the short term as to where it stops you from buying a place because you’re sitting on the sideline. Of course, buy a place that fits your budget and stay financially smart.

3 Steps to House Hacking

While we would love to give you an exact step-by-step plan to buy your house hack, it’s impossible too. We’ll repeat that house hacking is a balancing act that requires a compromise between your personal wants and investing wants. Everyone’s house hack will look different.

Here’s our broad, general advice:

#1: Talk with people who understand real estate and bounce ideas around. More likely than not, you have a lot more people in your life who think you’re crazy for wanting to house hack or become a landlord. That’s normal. Get networked in with people who have experience. You’ll learn a tremendous amount.

#2: Talk with a loan officer early on. You need to understand how much you can really afford and qualify for. Don’t depend on online calculators to tell you. Talk with a loan officer to get a “reality check.” You may learn that there is incorrect information that you need to correct on your credit report. Good to know before you ready to submit an offer because it can often take a few months to clean up. Or perhaps, you’ll learn that you can qualify for more or different financing program that’s a better fit for your situation.

#3: Start looking at properties! A common mistake for newer investors is spending too much time behind spreadsheets analyzing deals. Deal analysis is only 50% of the equation. The other 50% is your personal living situation. You need to look at properties to understand if the area is one that you want to live in.

Want To Talk or Look at Properties?

As we’ve said numerous times, running the numbers is only 50% of the equation. We’re always up for grabbing a cup of coffee to talk real estate or looking at some properties. Set up your real estate investment consultation with us. Our approach is different from many other Realtors out there. We take a consultative sales approach and want to help you create a plan to not only buy your house hack, but also build your Denver real estate portfolio.