I'm kicking around some ideas with a friend of mine and we got into a discussion about whether or not it is possible to do any form of house-hacking in an area like Hell's Kitchen or similar hotspots in NYC. I'm curious about any form of House Hacking from the @Craig Curelop playbook.
What do you think?
That's a great point, @Jaysen Medhurst ! have you seen any examples or numbers from people actively house-hacking in NYC that are inspiring?
Why not? One of my clients, @Ron Gallagher house hacks in a hot DC neighborhood in a house valued at roughly $1 million, and he gets paid to live there.
@Russell Brazil is right, I do get paid (roughly $2000 a month) to live in a really nice house in a really nice neighborhood in DC so you could definitely do something similar in NYC.
If you were going to go the NYC co-op route like @Jaysen Medhurst suggested, I would do what @Craig Curelop did and partition off the living room area and use that as my bedroom and then I would rent out the "real" bedrooms.
I remember this from the house hacking book! Very inspirational, guy killed it and didn’t even buy that property!!
@Craig Curelop I am not a lawyer and such matters should be consulted with a lawyer for a more thorough understanding. I would highly recommend people understand their state and more specifically city laws before starting a rent by the room rental. My interpretation of San Francisco rental laws would actually make the scenario you're describing illegal in the city of San Francisco. Your friend is the master tenant and rented to subtenants and is not allowed to "charge any subtenant more than a proportional share of the total rent the master tenant pays to the owner." Here's the SF rent ordinance I'm referring to:
Where a master tenant shares a rental unit with one or more subtenants, the master tenant cannot charge any subtenant more than a proportional share of the total rent the master tenant pays to the owner. The subtenant’s allowable proportional share of the total rent may be based on equal division by the number of occupants or bedrooms, or the square footage of exclusively occupied space. In addition, the reasonable value of housing services provided by the master tenant such as furnishings, utilities, parking, storage, cable or internet may be taken into account when setting the subtenant’s rent.
If a master tenant is found to charge subtenants "more than a proportional share of the total rent the master tenant pays to the owner" sub-tenants can petition the SF rental board for a rent adjustment and a refund for overpayment:
If a subtenant believes that he or she is paying a master tenant more than a proportional share of the total rent or that the initial rent paid to a master tenant for a sublet of the entire unit is more than the master tenant is paying to the owner, the subtenant may file a Rent Board petition against the master tenant on that basis. If the subtenant prevails, the Administrative Law Judge will adjust the rent to the proper amount and order the master tenant to refund any past rent overpayments.
Now you may be thinking, "wait a second, this is a SFR and is exempt from rent control." My understanding (again I'm not a lawyer) is any residence in San Francisco that has at least two renters renting by the room is considered a boarding house and boarding houses fall under rent ordinance.
Here's a link to the SF rental ordinance I'm referring to: https://sfrb.org/topic-no-154-limits-rent-charged-master-tenants
Maybe my interpretation of the law is incorrect but I would recommend people, especially in the SF Bay Area, be very cautious and know your rental laws thoroughly before engaging in any non-owner househacking venture.
@Kyle Stephens - My friend and the person in the case study requested permission of the landlord to this and that permission was granted. He was paying above market rent. I am in no way saying do this without landlord permission. That would for sure be illegal!
Everything you do to someone else's property you NEED to gain permission from the owner for.
Well said, @Craig Curelop !