All Forum Posts by: Grant Shipman

Navigating Zoning Laws: Challenges and Opportunities for Co-Living Real Estate Invest

Hey BiggerPockets Community,

As co-living gains traction as a viable real estate investment strategy, it's crucial to understand how existing zoning laws can impact these ventures. Recent discussions in Bloomberg and the Yale Law Journal shed light on the challenges posed by traditional zoning regulations and offer insights into potential reforms that could benefit co-living arrangements.

Zoning Laws and the Definition of Family

Traditional zoning laws often define "family" in narrow terms, typically limiting residential occupancy to individuals related by blood, marriage, or adoption. This restrictive definition can pose challenges for co-living arrangements, which may involve unrelated individuals sharing a dwelling. The Yale Law Journal article, "Zoned Out: How Zoning Law Undermines Family Law’s Functional Turn," highlights this issue, noting that while family law has evolved to recognize diverse family structures, zoning laws have lagged behind, potentially hindering innovative housing solutions like co-living.

Challenges for Co-Living Investors

For real estate investors interested in co-living, these restrictive definitions can lead to:

• Legal Barriers: Difficulty obtaining permits or approvals for co-living spaces due to non-compliance with traditional family definitions in zoning codes.
• Operational Challenges: Potential fines or legal disputes arising from housing arrangements that don't conform to local zoning definitions of a household.
• Market Limitations: Reduced ability to meet the growing demand for affordable, shared housing solutions.

Advocacy for Reform

The Bloomberg article, "Why Are Zoning Laws Defining What Constitutes a Family?" argues that zoning ordinances should prioritize functional families and not exclude safe uses of housing based on household composition. Reforming these definitions can open avenues for co-living arrangements, providing more flexibility for investors and addressing housing affordability issues.

Key Takeaways for Investors

• Stay Informed: Understand local zoning laws and how they define household occupancy. This knowledge is crucial when planning co-living projects.
• Engage with Local Authorities: Work with city planners and zoning boards to advocate for more inclusive definitions that accommodate co-living arrangements.
• Monitor Legal Developments: Keep an eye on legal scholarship and policy discussions that may influence zoning reforms favorable to co-living.

By staying informed and proactive, real estate investors can navigate the complexities of zoning laws and contribute to the evolution of housing policies that support diverse living arrangements.

For a deeper dive into these discussions, you can read the full articles here:

• Bloomberg: Why Are Zoning Laws Defining What Constitutes a Family?

• Yale Law Journal: Zoned Out: How Zoning Law Undermines Family Law’s Functional Turn

Looking forward to hearing your thoughts and experiences on navigating zoning laws for co-living investments!

Note: This post is for informational purposes and should not be considered legal advice. Consult with a legal professional for guidance specific to your situation.

Household size has been shrinking.  Are y'all seeing this in your rentals? What opportunity is there? 

www.realtor.com/news/trends/households-shrinking-spare-rooms

@Andrew C. It's works most anywhere- but not everywhere that rental real estate works well in. I like strong MSA's, high rents, & low purchase prices, to maximize cashflow & cash ROI. I'm all over areas with at least 50k people (Loveland, CO), but also places with a 1M+ (El Paso) and Large Areas like The Greater Denver Area. Co-Living, when done properly, should be less work per lease than LTR. For example, one $27/hr FT property manager of mine can manage 140 leases. I hope that helps!
@Marie Thomas: Yes, it's like selling pizza by the slice, so both renter & investor get more for less.  Each room will have a separate lease on it with a separate deposit following normal property management practices, and like you said, the leases have different start dates.  For example, most anywhere will get $700 room, $75 fixed rate utilities, $700 deposit, and then offer a 36 months, 12 month, or month to month lease ($350 fee if ending lease <90 days).  Also, co-ed is better.  Single-gender homes are only for transitional housing (like soberliving houses, halfway houses, etc).  I hope that helps! 

Quote from @Jarrod Ochsenbein:

Hello Grant, et al

    I am an out of state co-living investor.  I live in Oregon, but invest in Arizona.  I take 2000 sq ft homes and add bedrooms.  We redo the kitchen with granite or quartz, stainless steel appliances and new floors if needed.  The goal is to create nice affordable living that members enjoy and take care of.  I say we because my wife does the decorating and I do the rest. :) We currently have 24 units and looking to at least double that in 2025. 

I really like the multiple income streams from one property. If I loose a member from one of the houses I still have income being generated from that property. In fact I can have half of the rooms occupied and still pay the mortgage. It is small multifamily with 30 year fixed rate debt. There is more headache and maintenance than some other strategies, but the ROI to me is worth it.

that's awesome- thank you for sharing.  If there's a lot more headache- then I encourage you to implement or improve a Complete Household System, try to get SFR's with 6-11 bedrooms, no more than 3 rooms per 3/4-Full bathroom, and make sure there's one (not more than one) beautiful living room with a big screen TV.  Have you added anymore units yet? 

Quote from @Becks Hodge:

HI @Grant Shipman! I'm very interested in investing in co-living homes. I have been a traditional REI to date but love the co-living concept ... and ROI when done right!

That's awesome- I'm glad successful REI's like you are keeping their minds fresh & strong and open for new ideas :)

Howdy everyone- I love these follow-up comments. I cannot believe I missed them for so long! I apologize and I appreciate your patience. I post a lot to help people with co-living, and my wife is pregnant with twins- do I get a pass? (hahaha)

@D. Dee: yes please DM me anytime, and I will do my best to get back to you :) 
@Kim Scheid: fellow Coloradians!  Where are y'all at? We live in Estes Park and have a 2nd house down in El Paso.  
@Sue Burriss: We were all newbies once- welcome. Please DM anytime, and I will do my best to get back to you :) You can do this! 
@Marie Thomas: Think 5x3 (or bigger) 2500sqft (or bigger). Normal neighborhood house on a corner lot for a lot of parking.  Yes this is probably the best strategy for brand new people, but they need to study well and apply (like anything).  Please feel free to DM me anytime. 

🏡 Co-Living + House Hacking = Maximum Cash Flow & Financial Freedom

Hey BP Community,

If you’ve been house hacking or thinking about it, pairing it with a co-living strategy can seriously amplify your returns. I've been re-reading the BiggerPockets book The House Hacking Strategy by Craig Curelop, and the numbers are eye-opening.

🔥 Why Co-Living & House Hacking Work So Well Together

✅ Higher Rental Income Per Unit – Renting by the room typically beats traditional rental rates.
✅ Lower Vacancy Risk – Losing one tenant doesn’t mean losing all your cash flow.
✅ More Affordable for Renters – Competitive pricing attracts a steady stream of demand.
✅ Built-In Community = Lower Turnover – Tenants stay longer when they feel connected.
✅ Allows You to House Hack a Single-Family Home – No need to compete for pricey duplexes and triplexes!

💰 Real-World Cash Flow Boost

Take a 5-bed, 3-bath single-family home. Renting it as a standard unit might bring in $2,500/month. But with a co-living setup, renting out each bedroom separately at $850 per room could generate $4,250+ per month—a 70% increase in rental income.  If you turn any two "bonus rooms" (rec room, office, formal dining room) into two more bedrooms, then you're at $5,950+ per month—a 138% increase in rental income.

Now, imagine scaling this across multiple properties while keeping lower upfront costs compared to multifamily properties. This is how investors are maximizing both cash flow and affordability.

🚀 Making It Work

1️⃣ Optimize Your Space – Converting a living room or office into an extra bedroom can supercharge returns.
2️⃣ Target the Right Tenants – Young professionals, digital nomads, and students love co-living setups.
3️⃣ Automate the Management – Using systems for roommate screening, lease agreements, and shared expenses makes it passive.

Co-living is gaining serious traction in house hacking circles, and I’d love to hear from others who are using this model. Have you tested it? What’s working for you? Let’s compare notes!

🚀 24-Hour Case Study: Free Co-Living Marketing Strategy That Generated 695 Contacts & 15 House Tour Requests

Hey BP Community,

Wanted to share a co-living marketing strategy we tested that brought in some seriously impressive results in just 24 hours—completely free.

📊 The 24-Hour Results:

✅ 695 New Contacts
✅ 100% Email Open Rate
✅ 15 House Tour Requests
✅ 2 Applications Submitted

🔥 The Strategy: Livingsmith Partnership Database Approach

On Friday, January 24, 2025, we launched a simple but highly effective outreach approach to attract potential tenants and partners. The idea is to leverage pre-existing networks in a way that builds instant credibility and gets responses fast.

If you want to implement this strategy, here’s a link to the exact resource we used:
👉 Spreadsheet Link Here (just make a copy for yourself)

I also recorded a short video walking through how we set everything up, but since BiggerPockets has rules against sharing that kind of content, feel free to DM me if you have questions on execution.

Anyone else using creative co-living marketing strategies that are working right now? Let’s swap ideas! 🚀

The Rise of Co-Living: As Airbnb Faces Restrictions, New Housing Models Win in Court 🏡⚖️

Across the country, cities are tightening regulations on Airbnb and short-term rentals, making it harder for property owners to operate legally. Meanwhile, co-living models like PadSplit are winning legal battles, proving to be a sustainable, long-term housing alternative.

🔹 Airbnb is Facing Increasing Restrictions:

• New York City has implemented strict rules requiring hosts to register and be physically present, effectively banning many short-term rentals.
• Dallas and Atlanta have passed zoning laws banning short-term rentals in residential areas.
• California cities like San Francisco and Los Angeles are ramping up enforcement with hefty fines for non-compliant listings.

🔹 Co-Living is Gaining Legal Ground:

• Colorado eliminated all restrictions on the number of unrelated adults living together statewide as of July 1, 2024, marking a major victory for co-living advocates.
• This week, Jacksonville Municipal Court ruled in favor of PadSplit, voiding citations for “illegal boarding houses” on constitutional and fair housing grounds.
• Cities like all over like Washington D.C. are considering zoning reforms to allow more co-living developments as an answer to the housing crisis.

As Airbnb restrictions tighten, co-living is emerging as a scalable and legally sound alternative that balances affordability, tenant stability, and community needs. The question now is: Will more states follow Colorado’s lead, or will outdated zoning laws continue to stand in the way?

What do you think? Is co-living the future of housing? Let’s discuss! ⬇️

#CoLiving #HousingCrisis #AirbnbRegulations #AffordableHousing #LegalWin #RealEstateTrends

Great news for housing advocates and property owners! This week, the City of Jacksonville Municipal Court ruled in favor of PadSplit, voiding citations for "illegal boarding houses" on constitutional and fair housing grounds.

This marks a huge victory in expanding affordable housing solutions while navigating legal challenges. By working closely with hosts, legal teams, and city officials, PadSplit successfully defended its model, ensuring continued housing opportunities for those in need.

With this case setting a precedent outside of Atlanta, it strengthens the argument for more flexible and inclusive housing policies. The conversation with city officials will continue as we push for zoning reforms that allow sustainable and affordable housing solutions.

This win is a step forward, but there’s still work to be done! What are your thoughts on this ruling and its impact on housing accessibility? Drop your comments below! ⬇️

#AffordableHousing #HousingSolutions #Jacksonville #LegalVictory #PadSplit