Income Suite House Hacking with Jennifer:

This week, we have another Denver house hacking treat for you all! We know how high living cost areas can be a burden and wanted to give everyone a few examples as to how you can hack those expensive housing costs.

Jennifer and her husband first started with a house in Denver. They soon realized Airbnb was taking off and decided to go house hunt for a property that has an income suite that can easily be rented on Airbnb. Still keeping the original house and renting it out, Jennifer and her husband moved to a new house just outside of Denver. By using a hard money loan, she was able to make short-term payments while getting the Airbnb renovations done.

After living 3 years in this house, Jennifer and her husband decided to move back to the original house and renovate it into a similar Airbnb style house. By renting this Airbnb in the original out to travel nurses, Jennifer was able to cut down more than half of her housing costs. Here’s the full story:

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03/20/2023 12:02 pm GMT

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Transcript of the show:

Intro (00:03):

Across the world. People have their housing costs taken away as much as half of their income. Have you ever thought of trying to change that? The good news is there is a way house hacking is real and we are here to show you how other people just like you have made it happen. Welcome to the house hacking podcast and here is your host house hacking expert Andrew Kerr.

Andrew Kerr (00:29):

Jennifer, thank you so much for being on. I really appreciate you, your willingness to actually share the story. So how are you and where are you calling in from?

Jennifer (00:37):

Yeah, well thanks for having me. It’s a pleasure being asked. Um so I’m in Denver, Colorado and it’s actually snowing today and yesterday it was 75 degrees, so we have to get used to these big changes, but it’s all good.

Andrew Kerr (00:51):

Oh my goodness. You’re already getting snow. I mean we finally, I live down in new Orleans and we finally got the just cooler weather coming in of like the 60s and last night it barely hit 59 but the snow actually sounds really nice, right about now.

Jennifer (01:03):

yeah, it’s pretty for a day.

Andrew Kerr (01:07):

And does the snow just usually blow in from the mountains and does it last long at this time of the year or, or does it actually stick and stay around for a while?

Jennifer (01:14):

No, actually Denver is one of the sunniest places in the States and so as soon as it snows, it’s usually gone within the next day or two at the latest. Um, we rarely get, you know, anything more than six inches and the sun is so intense, it just melts it right away. So it’s pretty nice, you know, and cause you’re closer to the sun even when you’re outside and it’s supposedly 30 degrees, um, you could still be outside with just, you know, like a thin, long sleeve shirt because the sun just warms you up so much.

Andrew Kerr (01:49):

Yeah, that sounds like a winter that I, I could definitely deal with.

Jennifer (01:53):

Yeah. Yeah.

Andrew Kerr (01:54):

Well I’m glad you’re on. You know, I know a bit, a bit about your story. I think it’s really, really cool what you’ve done with sort of this house hacking, reducing your housing costs. Could you just sort of give us this high level summary of sort of your experience with reducing your housing costs?

Jennifer (02:10):

Yeah, so we basically a year after moving to Denver, uh, we started house hacking, we didn’t know it was referred to house hacking four years ago. I’m not sure when the term kinda took off, but, um, we learned about Airbnb about five years ago and we ended up finding, when we moved to Denver, we, we lived in our first house and then we fixed it up and then decided to move again to this sub or this I guess, subdivision or not subdivision, um, suburb I should say, uh, called Arvada, which is just outside of Denver. And we a house hunted for the reason to house hack. And so that our first house that we, that we did with house hacking, and so it was for about three years in that house. And then we decided to move back into the original house. We first moved into, uh, when we moved to the Denver area and we remodeled our basement in our now house hacking our basement in our current tenant or we call her a roommate right now cause she’s been with us now off and on for about a year. She stayed with us in Arvada and now she’s stayed with staying with us here in Denver proper.

Andrew Kerr (03:37):

Well that sounds like you’re pretty good tenant if she’s following you around to the cities that you live in and you liked her enough where she, she’s able to keep staying with you.

Jennifer (03:44):

Yeah, she’s great. She’s a traveling nurse. We get along really well, but she’s also rarely home. She, if she’s not working, she’s just out in the mountains exploring, just doing all sorts of stuff and exploring Colorado. So I just, you know, we’re always commenting about her energy. We just have no idea where she gets her energy. But yeah, it’s been great. So.

Andrew Kerr (04:10):

All right, well let’s, let’s really dig into this. So you had mentioned years before you moved to Denver, you had actually first started hearing about Airbnb and was that what sort of sparked the idea of, of doing stuff for you? And cause I know you said you started doing house hacking before you even realized it was called house hacking?

Jennifer (04:28):

Right. Yeah. So, um, we, we heard about Airbnb. We were living in Ohio before. We were there for my job for about three years. And I think that’s kind of when Airbnb was starting to pick up. And so we were looking at area in Airbnb as just a way to find places to stay wherever we travel. Um, but then, uh, we made the decision that we’re going to move to Colorado. Uh, cause I used to live here before when I was in middle school and high school and I always knew it was a place I wanted to come back to. And so when my husband Justin, he started looking, uh, for, with his work to transfer to Denver and we got lucky. He got approval for a transfer. Uh, it was over the summer, but I worked for a university and was really involved with the orientation and I told them I would stay through the orientation before I moved. And so we essentially had to live apart for about two months. And you know, the cheapest way to do that was to, for him to find a room to rent, um, until I was able to move there. And so we found on Airbnb, this couple who rented out their basement and it was a nice setup. It had, uh, an actually it had its own kitchen. Um, it shared, they use the basement as their living room, but on the off of the living room had a bedroom and a private bathroom for him. So he moved in with them. Uh, we arranged it, um, again on Airbnb and it, it was awesome for him that they were such a welcoming couple. Uh, they introduced him to all of his friends, uh, or all of their friends, I should say. And, um, it was just an instant community for him and made the transition for both of us because I obviously met them too when I moved to Colorado and they introduced me to their friends as well.

Jennifer (06:31):

And it was just an instant community when we moved here. It was amazing. Um, and we just, or he, us had just such a great experience for, with him staying there that we thought, well, that’s a pretty good idea. Not only are you meeting really cool people, but you’re getting the added benefit of helping paying your housing costs. Um, so when we first moved to Denver, we bought this house that was a fixer upper. And we, we bought it before we really knew that we wanted to do house hacking. And so we didn’t necessarily, we didn’t house hack our first house that we fixed up, but once we fixed it up, uh, is when we started looking for our next home. And that’s when we looked for a house with the intention to house hack. So we were looking for a house that was able to offer a private living space similar to what you had, uh, but also a way to enter, enter into the space somewhat privately. So maybe where they weren’t going through our front door, you know, and um, and so they had their own privacy and we had our owns. And so we ended up finding a, a split level house. So a tri-level house and um, we when it was basically four levels because they had finished out the basement. Um, and so what we did is we sectioned off like the lower two levels to be the, um, the rent, the renting space. So where we would list it on Airbnb.

Andrew Kerr (08:09):

Great. So this, this house that you fixed up, that was the split level. This was the first house he moved into Denver or this is the second one out in the suburb?

Jennifer (08:16):

The second one. Yeah. So when we first moved to, it’s a little confusing cause we’ve kind of done a full circle. So when we first moved to Denver, we bought this little bungalows, but I call it, we fixed it up. We then found our second home in Arvada at right outside of Denver. And we moved into that home, but we kept our bungalow and rented it out to longterm renters. And then, uh, one day I was doing some calculations and I was like, you know, we can save a lot of money if we sell our Arvada house and then move back into our bungalow and Denver. Um, and I think we can also still work it out if we fix up our basement to continue doing house hacking and our in our bungalow. And so that’s where we’re at right now is back in our bungalow and we had finished up our basement and rent that out now.

Andrew Kerr (09:10):

Awesome. So let’s, let’s dig into each of these different scenarios. I mean, let’s start with that first one. So when you’re on Ohio Do you remember, roughly did you guys own a house in Ohio or are you renting at the time?

Jennifer (09:21):

No, we were just renting because we were only meant to be there temporarily.

Andrew Kerr (09:26):

Okay. Do you remember roughly what you were paying for rent and what type of place were you renting?

Jennifer (09:30):

It was so affordable there. It was a $700 a month rent and, uh, it was outside of Cincinnati. And, um, it was a, a three bedroom, one bath house, probably about, uh, right at a thousand square feet.

Andrew Kerr (09:50):

Okay. And then you moved to Colorado or he moved first and did the Airbnb, and then you bought this bungalow and you mentioned you fix it up. Did you buy it and then fix it up or did you fix it up while you’re living in it? I mean, tell me a little bit about that.

Jennifer (10:05):

Yeah, that was an experience. So we bought it and fixed it up and lived in it while we fixed it up. So it was essentially my job. Um, I wasn’t able to find a job and what I did right away and I knew that it would take a while because my career is a pretty niche area. Um, and so when my husband got the job transfer, we decided that we would find a fixer upper. Uh, cause that’s the time when I was like really into those HGTV, you know, fix up those. And I was like, Ooh, that could be a fun project. And so we decided to find a fixer upper and we lived in the basement area, which, uh, was not nicely finished at all. I mean, it had carpet and it had some of that fun, 70 eighties wood paneling all over and it had a yes, yeah, it was grooving and it had a really cool retro bar actually. Um, and a really, really tiny bathroom. And so we decided just live down there and while I fixed up the upstairs and so I acted as the general contractor and I hired a bunch of subs to come in and help me, uh, you know, totally redo it. So it was a big first project taking down walls and everything, and it took about four to five months until we were able to move upstairs.

Andrew Kerr (11:40):

Okay. All right. So you bought it. Do you remember what, what year was that when you bought it?

Jennifer (11:45):

Um, so we’ve been here for five years about, so I think, I want to say it was 2013. Yeah, about, yeah. In 2013 we actually closed on September 11th, 2013.

Andrew Kerr (12:00):

And do you remember roughly what you bought it for?

Jennifer (12:03):

Yeah, we paid 200,000 for it.

Andrew Kerr (12:08):

And do you remember what type of loan did you do at that time and how much did you actually have to put down on the house?

Jennifer (12:13):

Yeah, I don’t remember this, this suffix, but it was just a conventional loan and I’m pretty sure we put the, the standard like the 20% down without paying PMI.

Andrew Kerr (12:28):

Okay. And in did the loan include any of the renovation costs or your plan was, let’s put the 20% down and then we’ve got some savings and keep earning money to keep doing the renovations. Okay.

Jennifer (12:40):

Yeah. So we used our savings for all the renovations. Okay. Yup. But, um, once it was done, um, and when we were looking for the second house, uh, to move into, we actually refinanced the bungalow. Um, and so we, the, the appreciation in Denver was pretty crazy around that time. And up to just recently, uh, appreciation, I think they said was in the double digits, like about 10% a year. So, um, we, our value had increased so, so much after doing the rehab, we were able to pull out a backout all of our rehab costs and, and I think a little extra cash as well.

Andrew Kerr (13:28):

Oh man. So you got all the rehab money back and a little bit extra, which essentially was some of the money you put for the down payment in and now you’ve got it refinanced and you’ve got this steady payment. So when you bought it and you refinanced it, did you specifically when you were refinancing it, no. You’re going to move yet or were you like, you know, let’s start to refinance it because we want to start looking around for some other stuff? Or was it just you happened to refinance then you started to look around?

Jennifer (13:57):

Yeah. Um, it was actually like, we decided we wanted to, to move. Um, and we had initially always thought we would just sell this house after we finished, finish rehabbing it. Um, but also at that time when we were looking into selling it, we were also hearing about um, the rent rates in Denver and how they were pretty high too. Um, and so we looked into how much we could rent it out as a longterm. Um, I get to a longterm tenant and uh, we were able to rent it out for about 2050 a month. Um, and so we decided to keep it just because the rent that we could get for it was so good. Um, and then once we decided we were going to rent it is when we looked into the refi stuff just cause it was recommended.

Andrew Kerr (14:52):

Yeah. Well it was really smart that you, you did refinance it before you left because if you’re refinancing it, when you’re still living in it for the folks that are listening in is you can actually refinance it in your rates as a primary residence are very different and better than if she were to move out and then go back and refinance it. She would have paid a lot higher rates in terms on the loan because it would have been considered at that point, an investment property. So yeah, it was really smart that you did it in that direction. And so you said your, your mortgage was about 2050 a month. Did that include the taxes and insurance or did you pay those separately?

Jennifer (15:27):

Uh, well, no, the rent was 2050 a month that we got.

Andrew Kerr (15:31):

payment on it then after you refinanced it.

Jennifer (15:32):

So I think at that, um, yeah, so it, it was about 1500 a month.

Andrew Kerr (15:40):

Okay. And was that 1500 with mortgage in insurance in there?

Jennifer (15:44):

Yeah. Yeah. That was with everything wrapped in, um, taxes, insurance, mortgage.

Andrew Kerr (15:51):

So you’ve got a good spread in there. You’re making like essentially $550 a month from your rent to, to your mortgage. And did you hire a property manager or did you and your husband decide, you know, we’re going to do this on our own, we’re gonna find a tenant and?

Jennifer (16:03):

yeah, so we found a property manager that was offering al a cart. So we hired them to find the tenant, like do the advertising and then find the tenant and put them under a contract. Um, and then after that we managed it ourselves. So when you do that, you usually have to pay almost the full amount of the first month’s rent, uh, to the property management company. Um, I mean everybody has their different rates, but that’s, I think that’s what it was for us. It was not quite the first full month, but close to it when I, if I remember correctly. And then after that she, they were hands off and we just managed it ourselves. So we weren’t paying like 10% a month to a manager.

Andrew Kerr (16:50):

Well that’s a really cool thing that they actually broke it and did it al la carte where if you just say, you know, here’s only the portion that I need to help with is finding the tenants and they take care of that. That’s a, I really liked that, that route to that you can go. So you took over the tenant, they put them in place. How’d you manage the tenant ongoing? Did you use any sort of software to collect rent or maintenance or was it just mail a check or pay?

Jennifer (17:15):

Yeah, it was really that just mailing a check. I mean since we live near like live nearby, uh, we did Arvada where we moved to wasn’t very far away. It was maybe a 30 minute drive to the house. Um, so we just, they mailed us a check. It was actually a really, really sweet deal because, uh, the tenant, their dad co-signed on it. And so their dad was the one mailing the check every month and they mailed it usually about two weeks or so. It was like the most ideal tenant situation you could have.

Andrew Kerr (17:54):

Yeah, yeah. That that was a, that’s probably well worth the fee that you had to pay the property manager to find a tenant like that where you get the dad who co-signed and taken care of.

Jennifer (18:02):

Yeah. Yeah. It was perfect. And we knew that was just a very lucky situation and we weren’t taking it for granted, you know, that was just so we did it really, it was our only rental properties, so we didn’t really have a need to get any like specific software or anything like that, so.

Andrew Kerr (18:21):

Okay. All right. So you refinance the place cause you knew you’re going to point attendant in and you wanted to start to go find a property and you’re looking in Arvada that the suburb of Denver specifically for a house hack. Was this your idea, your husband’s idea? Like were you both on board or did it take some convincing? I mean, explain that sort of situation. The idea of like, okay, we’re specifically looking for house hacking now.

Jennifer (18:45):

Yeah. Um, it, like, once we saw his experience with it, uh, living with our friends now, um, we just, you know, new for both of us. That was something we would want to do. Um, you know, I’ve really been in, my family has been in real estate for a while, so I’ve been exposed to, you know, what can come up, uh, you know, the positives and negatives, but, um, and I hadn’t really thought about us doing real estate in the sense of someone actually living with us, but, um, it just makes so much sense with such a great experience that he had and just the community part of it really. And so, you know, we were both sold on the idea pretty much. Um, immediately once he was able to, once we had finished our rehab on our little bungalow and started looking at other properties, we said that we definitely wanted to do something that, uh, we could rent it out and, you know, help save money on mortgage interests, taxes and all that.

Jennifer (20:00):

Uh, and also just to kind of return the favor that the couple he lived with did for us. So paying it forward, so to speak, because Denver is growing rapidly and especially around that time period when we moved. And, uh, several years after, uh, there was just a high percentage of people moving to Denver every day. And so, you know, we knew that it was likely going to be people moving to Denver, um, that we could help out to get acquainted with the area and, and share our connections and resources. So hopefully they enjoy it as much as we do.

Andrew Kerr (20:38):

Yeah, that was really cool that you guys were saying like, Hey, we want to do this. We know it’s financially beneficial for us, but at the same time it’s a way for us to pay it forward as well. So yeah. That’s really cool. So you started looking, you were both onboard, you found this sort of split level house. What, what year was that when you bought it?

Jennifer (20:57):

So I want to say that was 2014. Yeah, because we bought our bungalow in 2013 in September and then by the next year in October we were already in the Arvada house.

Andrew Kerr (21:17):

Okay. And do you remember roughly what you bought that that house for?

Jennifer (21:21):

Yeah. So we also did some rehab on that house and so we bought it for 310 and we did something fairly unique with it that most people probably would do with, um, their primary home, but we actually bought it with a hard money loan.

Andrew Kerr (21:42):

Okay. Can you explain real quick what a hard money loan is for anyone listening that doesn’t know what that is?

Jennifer (21:47):

So it’s essentially a short term loan and it’s based off like you qualify for the loan based off the property that you’re buying, not necessarily your income. Um, and it’s used a lot by, uh, investors who may be flipping homes. So the intent is not to keep that loan for a very long, it’s just to be able to keep it for maybe four to six months, you know, or shorter if you’re lucky. But the benefit about a hard money loan is that they’ll generally finance a hundred percent of the purchase price and then some of them will also include a certain dollar amount for the rehab. Um, and so since we knew we wanted to find a house to rehab, uh, or needed at least some rehab, we were introduced to the idea of using a hard money loan initially to purchase the house and get the funds to do the rehab and then we would refinance with a conventional loan.

Andrew Kerr (22:53):

Oh, cool. So you bought it, you did the hard money loan, you renovated it, you know, how much did you roughly have to put into it to sort of divide it up the way you wanted it to, to actually be a place where you could live in the one portion of the split level and the other portion could be rented out?

Jennifer (23:10):

Yeah. Uh, it was, um, so the home was 310 to buy and I think I put about 30,000 in it and we did the whole house. It wasn’t just setting up the, the tenant space. Uh, we remodeled the kitchen. Uh, we put new flooring throughout the entire house, um, painted. Um, and that, that was, yeah, just some tile work. But yeah, that was about it. You know the house like, Oh, we took a wall to open up the art kitchen and living area, but like the space where we were going to rent out, it was already pretty much set up. So they, the first one of the levels was just the living area and all we did was put in a, we set it up with like a little, uh, mini fridge, microwave coffee pot and that was about it. And then they had, and we’d had a sofa and a TV, uh, in to make a living room for the guests.

Jennifer (24:16):

And then they just had to walk down a few steps and that’s where it opened up to their bedroom and bathroom. And then, um, from the living area, you could walk from the guest living area. You could walk up a few these shorts, step short a staircase to our kitchen and living room. And I put a doorway at the bottom of the staircase to close off their living room from our kitchen and living room. Uh, just for sound barrier mostly. Yeah. So when we both had our TVs on, we didn’t hear each other, but we let the guests know they’re always welcome to use our kitchen.

Andrew Kerr (24:56):

Oh, cool. And so you bought it, you did the work, you refinanced it. Do you remember once you refinanced what’s your actual housing payment was for, for that, um, split-level property?

Jennifer (25:07):

Yeah, so, um, the, I think we’ve refinanced it for like, we were a it appraised after we bought it and did the rehab and appraised for about 350,000. So, you know, we didn’t really, it didn’t appraise enough extra, I should say, to where we were able to pull out all of our money that we were putting into it. So, um, the total payment that we ended up with, um, for mortgage taxes and insurance, I think was around 2050 or 2,100, one of those two. So there was a little bit of a bigger payment than we had with the bungalow.

Andrew Kerr (25:53):

Okay. So you’re around $2,100 a month. It’s all set up, renovated. You refinanced out of the hard money loan to conventional loan and now you’re ready to start finding tenants. And was your idea specifically short term rental, Airbnb VRVO and which platform did you decide to use and how’d you decide to price the unit and all of that fun stuff?

Jennifer (26:17):

Yeah, we decided to use just Airbnb and once we had it set up on Airbnb, we were just looking around our area, uh, to see what people were renting their space out for. And um, you know, we, most people they had a bedroom to rent out and whereas we had a bedroom and its own living area and like a little, um, I guess coffee station I should say, or kitchenette I should say. And so we knew we might be able to get a little bit more. So we’ve probably added maybe 20% more to the average rent we were seeing or by the room in our immediate area.

Andrew Kerr (27:04):

Okay. And then, so how did it ended up working out you, you posted it, you figured out what your rent was. I mean, how often did you have people in there? Was it people circling through every single week?

Jennifer (27:15):

Yeah. Uh, so we have, we got people in pretty quickly. Uh, we had a few short term, like just two days, uh, guests in at initially, but it wasn’t long that we then had, um, a guest who stayed with us for about, I wanna say she stayed with us for at least four months. Um, and it was too, she was building her house in Denver. She needed a place to stay. Um, cause I guess her lease was up. Um, and since she was building a house, you know, she didn’t want to sign a new lease. And so she opted to just go rent, you know, a room or a space somewhere that she could do up for a shorter period of time. And so she stayed with us for about four months and that was our first longterm guest. And then after her we had, uh, we mostly had at least one month stay guests. So I’m not sure, maybe because we offered a living room and a little kitchenette. Um, it was really appealing to the guests who wanted to stay a little longer. Um, so most everybody we had was with us for at least one month. Um, and it typically averaged out for three months at a time.

Andrew Kerr (28:43):

Man, that is wonderful that you had these people were, so were these folks that were doing business in Denver or was it your typical tours? Like someone’s coming over from Europe and wants to be in Denver for a month or someone’s, you know, living on one of the coast, some just wants to spend a winter in Denver so they can go hiking and skiing as much as they want.

Jennifer (29:01):

Yeah. It was actually a traveling nurses was the majority of them who stayed with us. Um, they would stay a three month stint cause that’s the contract to period for most traveling nurses. Um, and then we had, uh, one guest stayed with us because they came for medical treatment. Um, they were actually, it was unfortunate, you know, they had a type of cancer and they were experimenting with the cannabis, you know, and, and, and the medical marijuana that’s allowed here in Denver. So they came to as a trial to see if it would help them. Um, but a lot of them were moving here, you know, and, and needing, just try wanted a little bit of extra time to try to find a place to live rather than trying to find it in two or three days, you know, by staying at least a month. That allowed them to kind of get to know some of the neighborhoods a little bit better before committing, uh, for like a year’s lease or purchasing a property. But yeah, most of them were traveling nurses I would say.

Andrew Kerr (30:10):

And you know, what were you, you know, your payment was around $2,100 a month. What were you really averaging then for these month long? You know, stays people were at?

Jennifer (30:21):

um, we got about, uh, between 13 and 1400 a month, uh, for the month long.

Andrew Kerr (30:28):

Yeah. So I mean you basically more than cut your housing payments in half at that point.

Jennifer (30:32):

Yeah. Yeah. It was great. Yeah, it definitely helps cause you know, we weren’t really prepared for that much of a, a payment to make, you know, I mean, we made it work. We could have, we were able to do it without running it out, but it really kind of send us out with our finances. And so house hacking just made it so much more manageable and allowed us to have more flexibility with our budget.

Andrew Kerr (31:00):

Yeah, that’s great. And then, you know, you mentioned you had a lot of traveling nurses. Was there something specific you did for your Airbnb that you said, you know, great for traveling nurses or were there other websites you listed it on? I mean, how’d you, is there any tip or trick there?

Jennifer (31:16):

Um, no. At that time we only listed it on Airbnb and we didn’t even make any specific reference, you know, for traveling nurses. Um, but I think, you know, the fact that we ha we offered their own living room and kitchenette and it had a private bathroom as well. I think it was a big draw for people wanting to stay longer than a few days. Um, and we also allowed pets. So I think, I think that helps a lot too. I know that one of our guests, or I heard, I call her our roommate now, cause this is her fourth contract, she’s staying with us, she’s come back to Denver four times for her contract with her traveling nurse contracts. And um, she said that in between once she was in Arizona, she couldn’t find any Airbnb spaces that allowed her to bring her dog. Um, and so I think that was a big draw as well.

Jennifer (32:21):

Um, allowing pets, like we knew we would allow pets because we have two dogs and a cat of our own. And so we had rehab that the Arvada house to have like a really durable, we use this laminate flooring that was waterproof and scratch resistant. Uh, so we went with kind of like a hot higher level of laminate flooring for the house. And so we weren’t as concerned if, you know, a pet had an accident or had big claws, you know, if, you know, we weren’t worried about Woodforest being scratched up or, or carpet being stained. So I think that that’s a nice tip if people are trying to rehab a space, you know, for guests to use some sort of pet resistant flooring.

Andrew Kerr (33:11):

Yeah. It sounds like the two big things that you did to really make it stand out was it wasn’t just a room, but as a room in a private bedroom with a living area and this sort of little kitchenette coffee set up and then allowing pets seem to make you your listing really, really stand out.

Jennifer (33:25):

Yeah. And then I think, you know, I don’t think it’s totally necessary, but you know, we did sort of offer their private entry area. It was through our garage. So you can be creative about it. It doesn’t have to be, um, you know, an entry area, like a front door. Uh, we had them just go through our garage. They, we gave them their own keypad code to open the garage. They went in and into the house from the garage, you know, so it wasn’t like a standard front door, but it worked, you know, for their entry.

Andrew Kerr (33:59):

Yeah. So now you’re back living in the bungalow. So did you end up selling that house there or did you put tenants in and then you move back to your, your bungalow in Denver?

Jennifer (34:10):

Yeah, so we actually decided to sell it. Um, I was doing some calculations. Uh, it was after I heard about this, uh, new lifestyle called, you know, FIRE, financial independence, retire early. Sure a lot of listeners are familiar with it. And so I kind of, I discovered that and was really researching more about, you know, achieving FI financial independence. And so then I sat down and started adding up all of our costs, you know, with Arvada house and I knew what the cost was with the bungalow and I was comparing the two and I was like, you know, we could save ourselves 7,000 a year, which for us is a substantial amount if we move back to the bungalow. And that’s not even factoring in the house hacking, you know, of how much we were saving. I was just taking, comparing, trying to compare apples to apples, here’s our mortgage and interest here, here’s our mortgage interest in taxes, insurance at the other place.

Jennifer (35:14):

And here’s all of our utility expenses on with both properties. And it would save us 7,000 a month if we move back to the bungalow. And our tenant who, you know, was living in the bungalow for three years, the one with his dad paying, um, he had moved back home. And so we were looking at trying to rent it out or selling it actually. Um, and we weren’t, we already weren’t able to find new renters for the same rent amount. I think we just got lucky. Um, and then we actually tried to list it for sell to see about selling it. And, um, and then that’s when I was, you know, learning more about FI and other real estate methods. And I was like, you know what, if we sell our bungalow, which has, has a tenant, we’re going to have to pay taxes on the capital gains if we sell it. And I’m not prepared to do a 1031 exchange, which allows you to defer your capital gains tax. Um, you know, it’s a little bit more complicated. I won’t get into it, but I was like, but if we sell our Arvada house, which is our primary home, then we won’t have to pay any taxes.

Andrew Kerr (36:33):

Yeah. Because you’re married gains up to half a million in appreciation are all tax free because it’s been your primary residence.

Jennifer (36:41):

Exactly. So I, I, and then on top of that, we would save 7,000 a month for just our, uh, monthly costs of owning a home. Um, I was like, I think we should just move back into our bungalow and sell our Arvada house, uh, cause we want to invest in real estate. And that would have been the best way for us to be able to take back, you know, the money we put into it and have some build up our cash reserves to then invest in future real estate. Yeah. So that’s what we decided we would, and then we looked at our bungalow and we said, well, how can we house hack the bungalow? And we decided we would just remodel our basement, um, and make a bigger bathroom and do a similar setup. It was like the whole, the whole basement is the entire space of our upstairs. So we converted it, we reconfigured this space where it has again, its own living room, set up with the little kitchenette area and then made a private bathroom and en suite bathroom, a bedroom and an en suite bathroom.

Andrew Kerr (37:53):

And did you add any sort of kitchen or kitchenette downstairs or did you still sort of, if they needed a full kitchen they could come upstairs?

Jennifer (38:00):

Yeah. To save money. We didn’t add a, um, like a kitchen sink or anything, so we just, you know, and we actually liked that engagement typically with our guests and so we decided to just share our kitchen. Um, but we put down a mini fridge, um, a microwave and a coffee pot, just like the last place.

Andrew Kerr (38:25):

Yeah. And then so your, your mortgage on this is about 1500. You know, you liked the engagement, but if someone else was sort of in a similar situation, said, ah, you know, I’d rather not. I mean you could have closed it off, uh, theoretically and put in a little bit bigger of a kitchen down there. So it could have been two full separate spaces.

Jennifer (38:43):

Yeah. I mean we could have added, you know, a kitchen sink if we wanted to. I’m not sure how the coding would have worked by adding like a stove. You know, it might’ve been a little bit more challenging that way, but if we wanted to put more money in, we could have, but we only had 30,000 to put into it. And um, we pretty much ate every penny of that with just the things that we did. Yeah. It’s really, it’s really expensive to rehab in Denver.

Andrew Kerr (39:14):

I can only imagine. All right, so you’re, you’re back in the bungalow, you sold the split level. Any appreciation you got a didn’t have to pay taxes on, cause it was your primary residence. You’re in the bungalow, you still have the payment around 1500 a month. What do you in, in the downstairs basement? Was that all still, you know, looking for a longterm tenant or was your plan still short term rental? Let’s try to define more traveling nurses.

Jennifer (39:40):

Yeah. So yeah, we decided to do short term tenants again. Um, and when, and we only listed it on Airbnb. And so our first several tenants were short term, like two, two nights, three nights. Um, and we got pretty spoiled with our month long tenants, you know, month plus long tenants up in Arvada. And it was getting to be a lot of work to change out this space between these two, two nights or three night guests. Um, that we just decided that we rather just solely advertise to traveling nurses. Um, so right now we have our, our roommate, you know, who’s been with us for four times now and uh, you know, we, we arrange it off of Airbnb with her. Um, she just pays us directly. Uh, but we, we have decided that once she leaves in early December, we’re only going to advertise to traveling nurses. We’re no longer actually gonna list the space on Airbnb. Um, but we’re just going to utilize these Facebook pages or groups that traveling nurses use and other websites that they use, uh, to find housing when, when they go for a contract, uh, to hopefully find more, cause we’re only 10 minutes from several major hospitals and Denver. So it’s, it’s very convenient I would say for any traveling nurse.

Andrew Kerr (41:21):

Yeah. That’s great. So skip the Airbnb, you don’t have to pay them any more fees and you just advertise directly to the nurses in the, um, Facebook groups. So what, what are you getting right now for and what do you think, you know, once your sort of roommate has been with you four times as a traveling nurse leaves, what, what you think you’ll be able to get for rent for the downstairs space?

Jennifer (41:43):

Yeah, so we’ve been charging her 1300 because that was how much she was paying in Arvada. And so when she leaves though, we may try to increase it by a hundred. So try to get 1400 a month and see if, if that takes, you know, we might have to play around with it, but we do think we could probably get 1400 a month.

Andrew Kerr (42:06):

Yeah. So even if you, you’re still stuck at the 1300 and maybe you don’t get that 1400, even if you do, I mean you’re only, your housing costs are like 1500, so you’re, you’re living in a high cost of living area of Denver for a couple hundred dollars a month and an a bungalow that you fully renovated when you bought it.

Jennifer (42:24):

Mhm, yeah. Yeah. I mean it, it all just kind of worked out serendipitously, you know, just, uh, how, you know, people use these methods today, you know, intentionally to build up their real estate portfolios or, or keep more cash in their accounts. And like the steps we took, we didn’t realize we were following these popular methods, you know? Um, but yeah, it worked out great for us.

Andrew Kerr (42:57):

Yeah, it sounds like a really cool story. I mean, so if you’re sort of thinking back through this experience of house hacking before you knew it was actually called house hacking, what do you feel like your biggest win or success was over this period?

Jennifer (43:10):

Well, I mean obviously the financial savings is one, but, um, I, what I find even better is just, you know, the community that you build, the relationships that you build. So, you know, with our roommate now, you know, we’ve become pretty close friends and you know, we’ll have someone to visit and she travels all the time with her job. It’ll be great cause if, you know, we could easily visit her wherever she’s at. Um, and so that I think is one of the biggest wins. And also, you know, I guess tying into the financial gain is, you know, since we allow dogs and, uh, she has a dog and we have a dog, we help each other out with dog walking, pet sitting sometimes. Um, so normally you might have to pay someone to do that. We kind of have like a mutual trading of helping each other out.

Andrew Kerr (44:06):

That’s a really cool little side benefit on top of the whole saving tons of money, living in a high cost of area, being able to increase your savings rate. You’re also getting some free pet sitting too, and building this good friendship in a community. I love it. That’s really cool.

Jennifer (44:20):

Yeah, it’s awesome. You know, it’s just like, it’s music to our ears when she’s like, Hey, can I take the dogs to the dog park? I’m like, of course.

Andrew Kerr (44:29):

Yeah. That’s an easy one. I’d be like, yes. What type of dogs do you have?

Jennifer (44:34):

Oh, we have two Labradoodles.

Andrew Kerr (44:36):

Oh, cool. Yeah, we’ve got two Boston terriers, so we’re, we’re big dog lovers as well.

Jennifer (44:40):

Yeah. Yeah. They’re fun. And then she has like a Husky mallow moot, uh, that looks like a Wolf. So she has a pretty big dog herself.

Andrew Kerr (44:50):

Oh, cool. All right. So thinking back again through that experience, you know, what do you feel like your biggest challenge was? Or if you could go back and change something and do something differently? You know, what, what would you do?

Jennifer (45:03):

Yeah. Um, you know, there’s so few negatives with our experience. Um, you know, once we started house hacking, um, but I guess probably the more challenging time of it was when we did just have the shorter term guests. So shorter term, meaning like two nights stay. Um, and if we had anybody coming in, uh, the next day or the same day, just trying to coordinate time to get it cleaned, um, because, you know, we were both working two day jobs. Um, so just finding the time to get that space ready during that transition. But, you know, but that’s the beauty of this. You can always adjust to your lifestyle. And so for us, we decided the two nights, uh, guests just really aren’t worth it for us and we’d rather have the month long. And so when you’re doing that, you don’t have to worry about this space hardly ever.

Andrew Kerr (46:06):

Yeah. So thinking through the experience that you had, if you were to leave your current house, whether staying in Denver or move somewhere else, would you do a house hack again?

Jennifer (46:15):

Oh, absolutely. I just don’t know if we’ll ever stop doing it honestly. Uh, you know, some people talk about when they have kids, we’ll, we have a two and a half month old now and we have a nurse downstairs. I mean, what better situation can you have as new parents?

Andrew Kerr (46:35):

Yeah, yeah. Talk about having a cool tenant within ability. It’s like nurse living on site and that you’ve built this great relationship with. Yeah. I mean that’s sort of this extra extra benefit on top of it.

Jennifer (46:45):

Yeah, exactly. I mean, thank goodness we haven’t needed to ask her for any assistance yet, you know, but, um, that’s, that’s a reassuring feeling. And I know a lot of people say, Oh yeah, well we have kids so we’re not interested in doing it. Or when we have kids we’ll probably stop. I mean, I can understand why you wouldn’t, but for us, you know, it’s again, on top of the financial, it’s a community building and the benefits just outweigh, I guess maybe the inconvenience of having more space to yourself or privacy.

Andrew Kerr (47:21):

Yeah. And in reality, I think it’s scary at first when we’re not used to it. And then once we get used to it, it just becomes a second nature of Oh yeah, it’s actually not that bad. And like you said, it’d be like, Oh yeah, we’ll probably do it as long as we can. Like it’s, it’s normal for us now.

Jennifer (47:35):

Yeah. Yeah. I, I maybe like one way to, for people to warm up to the ideas, go be a guest first, you know, if they haven’t yet be a guest for the first, you know, and someone else’s, uh, Airbnb space and see how it, how it works out between you and the host. And it kinda gives you an idea of what it’s like for yourself to be a host. And I think by my husband being a guest first, that’s what really opened up our eyes, you know, to being host ourselves.

Andrew Kerr (48:07):

Yeah, that’s a really good tip and I love your story. I really appreciate you being on and sharing that with us above. Before we let you go, I like to ask all of our guests a set of final six questions that we call the famous six. So it’s six questions, rapid fire succession. Are you ready for it?

Jennifer (48:27):

Sure thing.

Andrew Kerr (48:28):

Awesome. All right, so number one, what is your person, your favorite personal finance blog or book that you’ve read recently?

Jennifer (48:36):

Well, I honestly don’t read a whole lot, so, um, I guess I could say the choose FFI. Um, I listen mostly to their podcasts. Um, and then I like to go, they have a great website to go on and, and try to catch up on any tips that, uh, you heard in some of their podcasts, uh, interviews. But that’s what really got me into this new mindset, new lifestyle of, and uh, and why we would have tried to house hack forever. We can.

Andrew Kerr (49:13):

I love their podcast. I think I’m around episode 60. I just found it beginning of this year, so I’m slowly catching up. But I like the fact that I already know there’s several years ahead of me, so I can listen to two, three, four episodes a week and know that there’s still more coming. But that’s a really good one.

Jennifer (49:29):

Yeah, definitely. I know there’s others that are older than, than theirs, but you know that that’s where I was first introduced. And so stick with that one for now.

Andrew Kerr (49:41):

Yup. And I think I know the answer to the second one, especially with you being in Denver, do you have a favorite real estate related blog or podcast?

Jennifer (49:49):

Yeah. So that’ll be bigger pockets.

Andrew Kerr (49:52):

Yup. Yeah, I knew that was coming.

Jennifer (49:53):

Yeah. Yeah. It’s, you know, when we first moved to Denver, I thought I would try to flip some houses after I rehabbed my rehabbed our own house. And, and then I was quickly a welcome to reality that, you know, flipping houses in Denver was a just a very challenging thing to do unless you have loads and loads of cash on you and, but I didn’t know about Bigger Pockets then. And then, you know, a year or so later, my friend mentioned we were talking real estate and she mentioned about bigger pockets. And then I started listening. I was like, Oh my gosh, why didn’t I know about this? You know, a year ago. I probably wouldn’t have quit so early.

Andrew Kerr (50:37):

Yeah. Yeah. And then number three, what has been your favorite travel destination so far?

Jennifer (50:45):

Uh, well, I have to, um, really love New Zealand and Kenya.

Andrew Kerr (50:52):

Oh, where, where’d you go when you’re in Kenya?

Jennifer (50:55):

So we went in, saw the Masa Mara, we sit, we stayed in a Messiah village. Um, you know, we flew into Nairobi and stayed there for a few nights and then went out to stay with the Maasai for about five days and then did the Maasai Mara, um, you know, Safari with them. It was amazing. Absolutely amazing.

Andrew Kerr (51:18):

Very cool. So oddly enough that, it’s funny that you mentioned that. So a couple of years ago I actually used to work for an aid organization and we did aid work in Kibera, which is a slum of Nairobi, Kenya. So I’ve had a chance to go to Nairobi and also went out to the Masa Mara. Um, I really loved my time in Kenya.

Jennifer (51:36):

Yeah. I mean living or I shouldn’t say living, but staying with the Maasai, you know, that was just a life changing, uh, event. It really taught you to recognize what’s important in life and that’s the people you’re with. You know, they didn’t care about, you know, all the materialistic items or living up to the Joneses. And so it really rooted me when I was there and just changed my perspective there on after you know, what’s, what’s worth living, you know?

Andrew Kerr (52:09):

Yeah. Very cool. All right, so number four, what is next on your travel or vacation list?

Jennifer (52:15):

Well, um, I can say for sure we’re going to Hawaii over the summer. I’ll be my first visit, but we’re going to go with my husband’s family. But, um, so that was like the, the family choice. I’m happy to go to Hawaii, but I really want to go to though as our own trip choice is, uh, Chile and Peru.

Andrew Kerr (52:38):

Oh, did you already have that on the books yet?

Jennifer (52:41):

Yeah, we did. And then we found out I was pregnant. Um, so it, it’s postponed it for probably at least a year or two. We were actually supposed to be there this last summer for, to see the total solar eclipse that was going through Argentina. Uh, so once we saw the total solar eclipse here in the U S we were like, where can we see it next? And it was ending next in Chile and Argentina. And so we had planned the trip and then I had to cancel it. So

Andrew Kerr (53:17):

well you’ll be able to get there I’m sure of that. Especially when your house hacking and you’re able to save this extra money. So yeah.

Jennifer (53:22):

exactly. Yeah. It will happen.

Andrew Kerr (53:25):

Yeah. I, I’m pretty sure it will for you. So that moves us on the number five. What is the biggest bucket list item on your list that you have yet to accomplish?

Jennifer (53:34):

Well, um, I guess it’s just, uh, achieving FI, uh, financial independence. So, you know, we’re doing it through the route of real estate and so our goal is to get 20 doors is what we think we’ll need, uh, to essentially retire. Um, you know, or at least completely supplement our income right now. So if we can do that, then we can both quit our day jobs and live the life of traveling.

Andrew Kerr (54:08):

Yeah. That, that sounds like you’re pretty awesome bucket list item to work towards. And then number six, uh, what’s your favorite life hack?

Jennifer (54:18):

Some people don’t really see this as a nice, a fun thing or glamorous thing to do, but I would say using public transportation, it’s kind of, it sounds a little boring, but we actually use opt to use public transportation as much as we can. Uh, because you don’t have to worry about the stress of traffic around you. You can read or pay or pay closer attention to like the podcasts and other music things that you want to listen to and you save money and not having to spend it, you know, on like we went down to one car because we can use public transportation a lot. So we’re saving money on not having a car payment or paying insurance. Um, and by using the bus or light rail in our area.

Andrew Kerr (55:06):

that sounds like a pretty good life hack and also personal finance hack as well. Yeah. Awesome. Well, Jennifer, thank you so much for being on and you’re sharing your story. I think it’s really cool what you did. And sort of how it’s evolved and how it’s helping you actually get closer to achieving that big bucket list item of getting to FI. So again, thanks for being on and sharing your story.

Jennifer (55:29):

Yeah, my pleasure. Thank you.

Speaker 1 (55:34):

Thank you for listening to the house hacking podcast. For more up to date information on house hacking to access links and resources mentioned in today’s show, and connect with the guest and host head over to that’s where your house hacking journey begins.


More Income Suite Style House Hacks:

Income Suite House Hacking in the Twin Cities –

Income Suite House Hacking with Amanda –

Also, be sure to check out our Ultimate Guide to House Hacking for a great overview of the different styles of house hacking and different types of tenant bases.

Check out the home page for “The House Hacking Podcast” here.