Moving into Denver Area - What Areas to Focus On?

[Brandon Itkin]

I'll be moving in June and hoping to house hack and then turn into a rental. Lots of neighborhoods, hoping someone can lend a hand with personal experience.

[Ben Rhodin]

Hi @Brandon Itkin!

I don't see an issue with your budget of $450k. $450k is the sweet spot we use for our house hacking clients, we look for 4+ bedrooms where you can easily add one or two bedrooms. This usually ends up being a typical ranch home with a basement, which will usually have 3/1 upstairs, and depending on how the previous owners set up the basement a 2/1 downstairs. These homes are the typical "starter" home so they tend to get less competitive as they aren't as desirable as the more custom newer builds. 

These properties also lend themselves better for after you move out, as they are easily converted to a single-family with an in-law suite in the basement, so you can rent each floor as a separate unit, instead of the whole house as one. You will see roughly a 30-40% increase in rental income this way, over a typical single-family rental. As that is the issue with most single families here in Denver, that they don't cash flow as is. Having to rely on maintaining rent by the room can be challenging as well after you move out, because of the increased work it takes, and the lack of property managers that will handle it.

I rarely have to get a client to go up to 500k unless they want the creme de la creme of homes, for a house hack. I think you are getting stuck on the bathrooms, as long as there is 1 bathroom for every 3 bedrooms you will be fine. You will rarely see a home with equal bathrooms to bedrooms, and will usually mean a very custom home, hence the price premium. Typically you will see 2 to 2.5 baths, one on each level, and maybe a master ensuite. 

Personally, I tend to steer people towards the north and west of Denver (Westminster, Arvada, Lakewood) as these areas are a bit more developed, and have good proximity for multitudes of tenants. They are typically within 30 minutes of downtown Denver, Boulder, and the mountains. So you have a greater pool for tenants than when you get south or east of Denver.