House Hacking SLC Strategy

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House Hacking SLC Strategy

Chris Hornbeak
Member since 2020 · 5 posts · 0 votes

Good Morning Bigger Pockets!

I plan to purchase a house hack-able property in SLC, and would like to strategize/ get some insight into the best way to go about it. 

My current plan is to find a large house in either Sandy or Cottonwood Heights. Ideally renting a basement apartment to a long term tenant. To cover the rest of the PITI, I intend to list a room or two on Airbnb.

Covid is temporary and the ski resorts aren't going anywhere, so I figure there is significant long term (winter) demand for Airbnb's near the entrance to BCC and LCC. 

I could rent the basement on Airbnb as well to maximize income, but I love the idea of low maintenance, stable income from a long term renter. 

My other idea is to find a property where building an ADU in the backyard is possible. I would live in the ADU, then rent the main house in it's entirety.

Am I crazy? Are there strategies you folks have seen work well? 

I would love to hear your thoughts.

Thanks!

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Cherie Orellana
Salt Lake City, UT · Member since 2018 · 219 posts · 182 votes
5y

@Chris Hornbeak Househacking is definitely the way to go. We had an Airbnb in Kearns that was rented 90% of the time. Often to people coming to ski, hike, concerts. I think you will have great success with Airbnb most anywhere in the Salt Lake Valley. Millcreek might be a good area to target as it's close to the mountains, highly desirable and they are adopting an ADU change early next year. There are also pockets that are already zoned 1-2 family that would work well for you. I did a duplex conversion in millcreek and also went through the city to get another property recognized as legal non confirming duplex. Those are 2 of our best performing properties.

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  • Dan Gustavson
    Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    Hello Chris - My advice is make sure you check the zoning board to make sure that the property is zoned for ADU's before you purchase it. Same goes for renting out a basement. The last time I checked, my area won't allow either one (not that it has stopped some people from doing it anyway). I think house hacking is the best strategy in SLC right now as the market has become crazy expensive. Good luck, Sandy and CH are both beautiful cities with the Mtn's so close. I'm just across the valley on the south/west side.

    2Reply
  • Andrew Powers
    Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y

    Welcome to BP. Make sure you look at local laws for residing in a basement (i.e. if allowed, egress), and for ADU's (i.e. if allowed, zoning, costs to build), and renting rooms (i.e. max number of occupants).

    I suggest joining local REI FB groups to gain more market knowledge and confirm demand of room renting / Airbnb / long term tenant.

    Covid may not be around forever(?), but it could impact your strategy temporarily. Just consider it as you target a niche.

    0Reply
  • Chris Hornbeak
    OP
    Member since 2020 · 5 posts · 0 votes
    5y

    Thank you for the insights! Will definitely join some FB groups to get more information. 

    The small multi family strategy is also very interesting, but very hard to contemplate with how little inventory there is. 

    0Reply
  • Nick Spurlock
    Member since 2019 · 1 post · 1 vote
    5y

    @Chris Hornbeak, I have a non-conforming mother-in-law duplex in Orem. I rent the basement out on Airbnb, and it is enough to cashflow on top of all bills associated with this address. However, I got my folks setup with Airbnb/VRBO in their basement in Sandy near Little Cottonwood and their mortgage is nearly covered. Their house is more of a forever home so the price is a lot higher than mine. 

    Hope this helps!

    1Reply
  • Chris Hornbeak
    OP
    Member since 2020 · 5 posts · 0 votes
    5y

    @NickSpurlock Thanks for the reply. 

    So far... Cottonwood heights is a no go zone for house hacking in general. No more than 4 unrelated people under a single roof. Strictly regulated STR rules. Bummer! I like the neighborhood.

    Sandy has better prospects, as does most of the east bench, for an Airbnb focused house hack centering on a basement unit. 

    There's huge seasonality with the wintertime tourism. I'm thinking the game is to collect enough income during peak season to cover the rest of the year, or at least part of it.

    Anyone have good luck automating their Airbnb/ what % for management fees is typical for the area? 

    0Reply
  • Cherie Orellana
    Salt Lake City, UT · Member since 2018 · 219 posts · 182 votes
    5y

    @Chris Hornbeak Househacking is definitely the way to go. We had an Airbnb in Kearns that was rented 90% of the time. Often to people coming to ski, hike, concerts. I think you will have great success with Airbnb most anywhere in the Salt Lake Valley. Millcreek might be a good area to target as it's close to the mountains, highly desirable and they are adopting an ADU change early next year. There are also pockets that are already zoned 1-2 family that would work well for you. I did a duplex conversion in millcreek and also went through the city to get another property recognized as legal non confirming duplex. Those are 2 of our best performing properties.

    7Reply
  • Chris Hornbeak
    OP
    Member since 2020 · 5 posts · 0 votes
    5y

    Thanks for the insight! Millcreek is one of my favorite areas, but it seems that anything that hits the market there is gone within a heartbeat. 

    Good to know about the ADU provision and the 2 family zoning. I'll keep my eyes open for that. I've always wanted to build an ADU! It sounds like a really fun project that adds a huge amount of value.

    0Reply
  • Simeon Miller
    Fort Wayne, IN · Member since 2018 · 33 posts · 25 votes
    5y

    @Chris Hornbeak

    I would also check into city ordinances on sort term rentals (Airbnb and vrbo) most city’s do not allow them so if you are planning on that strategy I would suggest that you have a plan B.

    0Reply
  • Andy Jenkins
    Realtor · Minneapolis MN · Member since 2018 · 84 posts · 61 votes
    5y

    You're right, the ski resorts aren't going anywhere. Snowbird is SICK! I've worked in the ski industry for 25 seasons over 3 continents, and the Cottonwood Canyons can hold their heads very high. People want to ski here and they need a place to stay.

    Be careful. Cottonwood Heights are VERY strict on STRs, Sandy requires you to live there. Does that mean you can't do it, nope. I know people that run STRs near the mouth of the canyon; it's been their 25 year business. Read up. What's your risk tolerance if someone slips and has an injury on your illegal property?

    https://www.cottonwoodheights.utah.gov/city-services/community-development/community-development-faqs

    Some information on Short Term Rentals in Cottonwood Heights. Mostly that they're not allowed.

    https://sandy.utah.gov/886/Short-Term-Rentals

    Information for Sandy City.

    1Reply
  • Brittney Peabody
    Rental Property Investor · UT · Member since 2018 · 16 posts · 15 votes
    5y

    I am currently house hacking in Sandy - It is going great! Utah is growing like crazy, what makes the valley such an interesting prospect is that people can't build west without leaving the county because of the lakes, and people can't build east because of the mountains. This makes for the property in the salt lake area increase in value as the area grows in popularity as there is only so much land between the two geographical dividers. The new business and ski resorts help this as well. Salt Lake is more open to ADUs than they were a few years ago, but it is still a tough battle as many cities not only have requirements for the ADUs if they allow them, but also how many non-related family members can live in a unit. In Provo this number is as little as 3! A lot of cities like Millcreek and Lehi are requiring a business permit to run rentals (aka: less cashflow as you pay money to the city every year). Definitely keep doing what you are doing and asking seasoned investors on the areas they have invested in. I know I personally have cities I would stay far away from in the valley! 

    As long as your numbers work out though - go for it! I found a special niche in renting per room that helps my cash flow stay high and vacancy rates low. I find a lot of value and purpose looking after my properties in the valley and the system I have in place works for me. There are so many options in Real Estate - find what you love and work hard towards it! If Airbnb and Vrbo are your thing - go for it! 

    0Reply
  • Brittney Peabody
    Rental Property Investor · UT · Member since 2018 · 16 posts · 15 votes
    5y

    I am currently house hacking in Sandy - It is going great! Utah is growing like crazy, what makes the valley such an interesting prospect is that people can't build west without leaving the county because of the lakes, and people can't build east because of the mountains. This makes for the property in the salt lake area increase in value as the area grows in popularity as there is only so much land between the two geographical dividers. The new business and ski resorts help this as well. Salt Lake is more open to ADUs than they were a few years ago, but it is still a tough battle as many cities not only have requirements for the ADUs if they allow them, but also how many non-related family members can live in a unit. In Provo this number is as little as 3! A lot of cities like Millcreek and Lehi are requiring a business permit to run rentals (aka: less cashflow as you pay money to the city every year). Definitely keep doing what you are doing and asking seasoned investors on the areas they have invested in. I know I personally have cities I would stay far away from in the valley! 

    As long as your numbers work out though - go for it! I found a special niche in renting per room that helps my cash flow stay high and vacancy rates low. I find a lot of value and purpose looking after my properties in the valley and the system I have in place works for me. There are so many options in Real Estate - find what you love and work hard towards it! If Airbnb and Vrbo are your thing - go for it! 

    0Reply
  • Chris Hornbeak
    OP
    Member since 2020 · 5 posts · 0 votes
    5y

    Hey everyone, if you are open to it, please share your success stories of HH in the valley. 

    Has anyone had success in areas west of I-15? If so please share. 

    Its looking like Millcreek is where I want to focus, it seems to be a good split in demand between the Cottonwood canyons and Park City. With that said... The market is so aggressive right now, it may be difficult/ impossible to find a property where the numbers work just right. 

    The prices of properties west of I-15 is very interesting, but desirability for Airbnb's and long term rentals is surly less than further east. I'd like to hear your thoughts. 

    0Reply
  • Dan Gustavson
    Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Chris - I have a LTR Townhouse in Herriman and it does well and has appreciated a lot since I purchased it in 2016. Though I was overpaying when I bought it, looking back, wish I could have bought 10 more. The south-west portion of the valley is exploding since it has the most open land in the county. However, prices have gone up dramatically and it's very difficult to find numbers that make sense. Been looking for my second property in the area for months now. I have also been looking out of state where numbers are more attractive.

    0Reply
  • Alfredo Lara
    Member since 2019 · 8 posts · 2 votes
    5y

    I am getting ready to buy my first property to house hack. An owner occupied duplex or a house with a mother in law apartment. Any realtors with experience in this that could help me out ? 

    0Reply
  • Andy Jenkins
    Realtor · Minneapolis MN · Member since 2018 · 84 posts · 61 votes
    5y

    @Alfredo Lara, I just sent you a DM

    0Reply
  • Nicole Lach
    Member since 2021 · 2 posts · 0 votes
    5y

    Hi Chris, stumbled upon your post and interested to see where you are at now. I am going to be in SLC in July to investigate the feasibility and neighborhoods to find a house hacking deal like you desire. Would love to learn from you. 

    0Reply
  • Nicole Lach
    Member since 2021 · 2 posts · 0 votes
    5y

    Hi Chris, stumbled upon your post and interested to see where you are at now. I am going to be in SLC in July to investigate the feasibility and neighborhoods to find a house hacking deal like you desire. Would love to hear any new insights you have on locations and the 2021 market in SLC.

    0Reply
  • Christopher Tomasetti
    Architect · Salt Lake City · Member since 2019 · 7 posts · 3 votes
    5y

    Hi everyone, Just came across this thread and this is exactly what I'm doing right now.  Just bought a house in Sandy, or am under contract rather, and am looking to house hack. 

    Does anyone have any experience dealing directly with Sandy city planning, specifically to get a conditional use permit for an accessory apartment?  I'm debating on whether or not to try get the permit.  I'm not worried about navigating the zoning and code regulations, but more concerned about how much of a pain City Planning is to work with.  If anyone has gone thru this process or had any dealing with the city I'd be interested in how easy or hard they were to work with.

    0Reply
  • Lorenzo Dudley
    Rental Property Investor · Orem, UT · Member since 2018 · 8 posts · 4 votes
    5y

    @Christopher Tomasetti

    Hey Christopher I know Utah just past a bill to make it easier for people to get a ADU unit approved the bill is called HB 82, if I was you I would do some research on that. I believe it does not come into effect until October 1st but it is going to be a sate law that all cities will have to allow ADU's. They want to help with the housing shortage and they are going to make it a lot easier to get the permit. I am currently waiting on the bill to get my House Hack permit because Orem does not allow ADU units to be larger then 1,000 square feet and my unit is 1,025.

    2Reply
  • Christopher Tomasetti
    Architect · Salt Lake City · Member since 2019 · 7 posts · 3 votes
    5y

    @Lorenzo Dudley Thanks for the heads up on HB 82, I hadn't heard of that bill.  Hopefully it will make things a bit easier.  I'm definitely a bit leery of them requiring fire separation between units etc.  Since the unit doesn't need much work I'd hate to have to open up walls to prove it meets building code requirements for fire separation etc. I'll read the bill and see what it has to say.  Cheers!

    0Reply
  • Dan Gustavson
    Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Lorenzo Dudley - Great news that it passed, im in Herriman where they don't allow ADUs for the most part. Going to convert my basement into a rental.

    0Reply
  • Jian Wei Tandric Bench
    New to Real Estate · Salt Lake City Utah · Member since 2018 · 5 posts · 1 vote
    5y

    @Chris I am currently house hacking in West Valley area. So far it is going great. 100% capacity all year round. West Valley also has restrictions on number of people unrelated, under the same roof. However, it is still doable and the house is still cash flowing. You just need to be creative with your investment. For example: prior to purchasing the property, I have made plans to build out more driveways to make sure my tenants don't park on the streets all the time. That way I'm not causing any issues with the city, neighbors, etc.

    best of luck.

    0Reply
  • Brandon Turman
    Member since 2020 · 5 posts · 0 votes
    5y
    So HB82 has certainly smoothed out some roadblocks for legally renting out a mother-in-law unit to a long-term renter when the home is owner-occupied, but what about after you move out? After that, HB82 no longer applies.

    Is it then considered illegal to rent the home out as two units?

    Related links: 

    "Enforcement provisions were also added to ensure that internal ADUs are not utilized for short-term rentals on sites such as AirBnB or VRBO. The use of ADUs as short-term rentals is a common concern for neighbors whenever ADUs require public hearings."

    0Reply
  • Jesse Miller
    Member since 2018 · 6 posts · 1 vote
    5y

    I bought i four plex in rose park last year. I stand behind it and it seems that its on the up and up since its soo close to down town with out down town prices. 

    0Reply
  • Josh Green
    Developer · Millcreek, UT · Member since 2021 · 15 posts · 5 votes
    5y

    @Chris Hornbeak I'm a little late to this thread... We bought a house in Millcreek last year and are working on finishing up a basement AirBnB. It's not finished yet (so close) and we haven't been approved by the city, but it looks like a pretty straightforward approval process. They really just want to be sure that you have enough fire exits.

    0Reply
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