Hey ya’ll it’s a good day for Colorado investors. Governor Polis signed Bill HB24-1007 yesterday which eliminates occupancy limits previously set by local jurisdictions. This means no more capping how many unrelated people can live in a single family house to 3, 4 or 5 individuals.
Let’s break down how huge of a deal this is!
The 2022 Census for Denver Colorado noted that the per capita income was $56,000. After taxes at 23% we’re down to $43,000 which is $3,600 per month gross income.
Apartments.com notes that the average rent in Denver, as of April 2024, is $1,700 or 47% of the total gross income of the average renter. Thats bananas! That’s less than $1,900 people have left for paying off loans, groceries, gas or health care!
Okay, here is why passing this bill was crucial to affordability & Denver investors.
Denver investors are now legally able to rent bedrooms in single family homes to 6, 7 or 8 individuals. And I’m not talking cramming people into houses or bad living conditions. I’m talking about thoughtfully renovated homes designed for co-living. Think multiple kitchens, private bedrooms with locks on the doors and well designed community spaces.
We’ve been helping our investor clients do this model for years, and in anticipation of this bill passing perfecting the model (even investing in these properties ourselves!).
>> See House Hack a Rent-By-The-Room Case Study <<
And here’s why this law passing is critical to investors – with current home prices and interest rates, buying a single family home and renting to 4-5 people doesn’t cover the mortgage. But, adding renters 6 or 7 allows investors to breakeven or even cash flow on a property.
Download The FI Team deal analysis calculators, see the difference in renting 5 rooms versus 6 or 7, those numbers are in the black, with the right property.
If you need help analyzing rent-by-the-room properties in Denver, reach out! We’d love to help you land a deal.