Turning Spaces into Profits: The Ultimate Guide to The Rent-By-The-Room House Hack

It’s no shock that here at The FI Team were big fans of the house hack. Why? Because many of our agents got started in real estate investing with the house hack and we love helping others do the same. There are varying comfort levels of the house hack (i.e. comfort continuum) and varying ways to hack your house – short-term rent it, rent part of it or rent-by-the-room to name a few.

Let’s dive into the ins and outs of how to master the art of house hacking through renting-by-the-room.

Choose the Right Property

Successful house hacking starts with selecting the right property. Look for homes with multiple bedrooms, ideally situated in areas with high rental demand. Consider other upsides of the layout. Are there duplicative living areas that could be turned into bedrooms? Room for a second washer & dryer? Space in the basement for a second kitchen or kitchenette?

Understand Local Regulations

Before diving into rent-by-the-room, familiarize yourself with local regulations and zoning laws. Some areas may have restrictions or specific requirements for renting out rooms such as how many unrelated people can live in one house. Check out The FI Team Investing In and Around Denver resource that outlines max. occupancy in Denver Metro Areas. Ensuring compliance from the start will save you headaches down the road.

Create Separate Leases

Optimize your approach by creating individual leases for each tenant. This not only streamlines the rental process but also allows for greater flexibility in managing the property. Each tenant becomes responsible for their portion of the rent, simplifying the financial aspects of your investment. If you need guidance getting your property listings and leases reach out to a FI Team agent – let us know how we can help.

Furnish Common Areas Strategically

When renting-by-the-room, strategically furnish common areas to promote a sense of community while maintaining privacy. Consider shared spaces like the kitchen and living room, ensuring they are well-equipped and inviting for all residents. As the landlord you should furnish the common areas, but have renters furnish their own bedrooms. Check out this YouTube to hear how one couple has perfected their RBTR layouts to increase rents and renters satisfaction! 

Screen Tenants Thoroughly

Tenant selection is crucial for the success of renting-by-the-room. Implement a thorough screening process, including background checks, rental history, and references. Aim to create a harmonious living environment by selecting tenants with compatible lifestyles and stick true to your standards for a high caliber of renter.

Set Clear House Rules

Establishing clear house rules is key to a successful rent-by-the-room arrangement. Clearly communicate expectations regarding shared spaces, quiet hours, and responsibilities. A well-defined framework fosters a positive living experience for all residents.

Leverage Technology for Management

Make use of technology to streamline property management. Platforms and apps can assist with lease management, rent collection, and communication with tenants. Embrace digital tools to make the renting-by-the-room process efficient and organized.

Optimize Rental Income

Renting-by-the-room allows you to maximize rental income by charging individually for each room. Conduct a thorough market analysis to set competitive room rates, taking into account local rental trends and property features. Check out estimated rents for bedrooms in and around Denver to get a sense what each bedroom is worth. 

Renting-by-the-room stands as a strategic and profitable strategy in the current market. By carefully selecting your property, understanding local regulations, and implementing smart management practices, you can turn you optimize your rental income and make the most off your rental property.


Ready to get into a house hack!? Reach out! We’d love to help you make this goal a reality.

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