House hacking in the Denver metro: rent out a room or a unit, cut your housing cost, and start building the down payment for property number two.
House hacking is the practice of making your primary residence produce income: rent out a spare bedroom, a basement apartment, or a unit in a small multifamily building you live in. Denver buyers use it to slash housing costs and build the savings that fund property number two.
It is also one of the fastest on-ramps to the 0 to 3 ladder, because the house you already need covers part of its own payment.
Instead of a single-family home, buy a duplex, triplex or fourplex, live in one unit, and rent the others. Owner-occupied financing for two-to-four-unit properties starts at low down payments in many programs, and the other units' rents offset your housing cost substantially.
The numbers are compelling: your tenants carry the property while you live free or nearly free, build equity, and learn landlord skills on a small scale with you on site. It is the closest thing to buying an investment property with an owner-occupied mortgage.
Lenders factor a portion of expected rental income into your qualification on an owner-occupied purchase. That means the duplex you thought you could not afford may qualify using projected rent from the other unit.
The exact calculation depends on the loan program and requires proper documentation. Johnny runs house-hack scenarios for Denver metro and Colorado Springs buyers regularly and will show you the math before you commit to a property type.
House hacking works when the layout, location and rent projections work. A basement with no egress, a neighborhood with weak rents, or a property with brutal maintenance will drain the hobby fast.
Talk to a mortgage pro who is also a landlord before you shop. Johnny can sanity-check the rental numbers, your budget and your exit plan, so the hack helps you climb instead of slowing you down.
Colorado mortgage professional, active investor and landlord, and founder of The Real Estate Ladder. He has owned, lost and rebuilt real estate wealth, and now helps Colorado homeowners climb from 0 to 3 properties, one smart mortgage at a time.
An everyday homeowner can move from their first house to three properties. Here is the BUY, BUILD, CONVERT, REPEAT roadmap Johnny Macias teaches Colorado buyers.
Yes, you can keep your current house and buy another one. Here is how Colorado homeowners qualify for a second mortgage while converting the first home into a rental.
When and how Colorado lenders count rental income from your current home when you buy the next one: signed leases, the 75 percent rule, and what to prepare.
This article is the map, not the walk. Bring your numbers and Johnny will show you the route that fits your income, your credit and your goals.
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