Want your Denver home to help pay for itself? If you are exploring house hacking, you are in good company. Denver has the housing mix and renter demand to make this strategy work, but only if you match the right neighborhood to the right approach. In this guide, you will learn how house hacking works in Denver, which neighborhoods fit each strategy, what rules to check, and a simple checklist to move from idea to action. Let’s dive in.

House hacking in Denver, explained

House hacking means you live in one part of a property and rent out the rest to offset your mortgage. Common models include renting extra bedrooms, finishing a basement or garage as an accessory dwelling unit, buying a duplex to fourplex and living in one unit, or running a licensed short‑term rental while you occupy the home.

Denver is suited for house hacking because of its diverse housing stock and steady renter demand from students, young professionals, healthcare and university staff, and downtown workers. Older homes with basements, small multi‑family buildings, and transit access all shape demand and potential rent. Your fit depends on your timeline, budget, and comfort with renovations or management.

Know the rules before you buy

ADUs and conversions

Denver uses city permitting and zoning to govern accessory dwelling units. Lot size, setbacks, height, parking, and utility connections can affect what is allowed. Always confirm current ADU rules, building codes, and habitability requirements with the City and County of Denver Planning and Development before planning a conversion.

Multi‑unit zoning

Duplexes and small multi‑family buildings exist across many neighborhoods, but the zoning designation controls use. Review permitted uses, lot coverage, floor area ratio, and any overlay districts at the specific address. Older conversions may have unique histories, so verify what is legal today.

Short‑term rentals

Denver regulates short‑term rentals with licensing, tax registration, and in many cases a primary residence requirement. If you plan to use Airbnb or similar platforms, confirm whether your property and zone allow it, and understand occupancy and tax rules before assuming that income.

Permits, safety, and inspections

Legal rentals require proper permits and inspections. Expect to document egress, smoke and carbon monoxide detectors, and electrical and plumbing compliance. Unpermitted work can create insurance and financing issues, so build time and budget for bringing spaces up to code.

Parking, occupancy, and HOA covenants

Local occupancy standards and on‑site parking requirements can shape the layout and number of rentable spaces. If the home is in an HOA, review covenants for rental and ADU restrictions before you write an offer.

Match your strategy to neighborhoods

Below are Denver areas that commonly align with each house hacking model. Use these as a starting point, then verify zoning, permit history, and rents at the specific address.

Duplexes and 2–4 units

• Capitol Hill and North Capitol Hill
  Typical stock: small multi‑family buildings, historic homes converted to multiple units, walk‑ups.
  Demand drivers: close to downtown and nightlife.
  Pros: high renter demand and walkability. Cons: competitive pricing and limited parking.
  What to check: zoning for older conversions and inspection history.

• Five Points and Curtis Park
  Typical stock: row houses, duplexes, and small apartment buildings.
  Demand drivers: light rail access and proximity to downtown amenities.
  Pros: increasing demand and ongoing redevelopment. Cons: some historic overlays may affect renovations.
  What to check: building condition, historic designations, and legal unit count.

• Baker and South Broadway
  Typical stock: a mix of single‑family homes with potential basement units, duplexes, and small multi‑family.
  Demand drivers: restaurants, nightlife, and transit.
  Pros: strong renter interest. Cons: street parking and noise can affect tenant experience.
  What to check: permit history and parking layout.

Single‑family with an ADU

• Park Hill and Montclair
  Typical stock: larger lots that may support ADUs or garage conversions.
  Demand drivers: stable, long‑term renter base.
  Pros: room to add value with a second unit. Cons: character rules or HOA covenants can limit exterior changes.
  What to check: lot setbacks, sewer capacity, and ADU eligibility.

• Washington Park and Congress Park
  Typical stock: older bungalows and cottages, often with basements suitable for permitted apartments.
  Demand drivers: consistent demand from professionals and families.
  Pros: stable rents. Cons: possible historical or design review.
  What to check: egress, ceiling height, and separate entrances for basement units.

• Berkeley, Highlands, and Sloan’s Lake
  Typical stock: a blend of single‑family and small multi‑family, popular with young professionals.
  Demand drivers: parks, restaurants, and easy access to downtown.
  Pros: strong rental interest. Cons: parking requirements and permit timelines can impact projects.
  What to check: ADU permissibility on the specific lot and utility tie‑ins.

Value and higher initial cash flow

• West Colfax, Sun Valley, Globeville, and Elyria‑Swansea
  Typical stock: more affordable single‑family and older multi‑unit options, with ongoing redevelopment in some areas.
  Demand drivers: proximity to downtown and new projects.
  Pros: lower purchase price can improve cash flow. Cons: varying neighborhood stability and industrial adjacency in places.
  What to check: area plans, environmental reports, and vacancy trends.

• North Park Hill and Northeast Denver
  Typical stock: a mix of single‑family homes and duplexes with renovation potential.
  Pros: entry price points can be more accessible. Cons: block‑by‑block differences.
  What to check: zoning and nearby developments that affect comps.

Short‑term rental house hacking

• LoDo, Ballpark, Lower Downtown, RiNo, and Highlands
  Demand drivers: entertainment, stadiums, conventions, and tourism.
  Caveat: licensing and primary residence rules are strict in many zones. Do not rely on STR income until you confirm city requirements and any HOA rules.
  What to check: STR license steps, tax registration, and lease rules.

University, medical, and job hubs

• Hilltop and University Hills
  Demand drivers: proximity to hospitals and university areas.
  Pros: steady tenant pools from healthcare and education.
  What to check: commute routes, transit access, and unit mix that fits typical renters.

Financing, taxes, and insurance basics

• Financing options
  FHA loans can be used to buy 2 to 4 unit properties if you will live in one unit. Conventional and VA loans are options for owner‑occupants as well. For ADUs or heavy renovations, consider renovation loans or construction financing. Underwriting rules differ, so speak with lenders early.

• Taxes and reporting
  Rental income is taxable, and you can usually deduct eligible expenses like the rental share of mortgage interest, depreciation, repairs, property taxes, and insurance. If you rent bedrooms in your home, you may need to allocate personal and rental use for deductions. Short‑term rentals can also require local lodging tax and registration.

• Insurance and liability
  Standard homeowner policies may not cover rental activity. Ask about landlord or dwelling policies and consider umbrella liability coverage. For STRs, specialized coverage is often recommended.

• Practical setup
  Separate meters make billing simple but are not always required. Plan for soundproofing, safe egress, and clear entrances. Build in assumptions for vacancy, seasonality, maintenance, and tenant turnover.

Your Denver house hack checklist

Use this list to pressure‑test any deal before you move forward.

• Confirm zoning and permitted uses for the exact address, including ADU rules and any overlays.
• Check short‑term rental licensing and primary residence requirements if STR income is part of your plan.
• Pull permit and inspection history, and look for unpermitted work or complaints.
• Review parking requirements and on‑site capacity under current code.
• Gather rent comps for your specific unit types and neighborhood. Use multiple sources and property managers for validation.
• Verify utility metering and submeter options. Plan how you will bill tenants for shared utilities.
• Read HOA covenants for rental or ADU limits, if applicable.
• Order a full home inspection. Add electrical, plumbing, foundation, and HVAC specialists for older properties.
• Review neighborhood data that matters for your resale and tenant pool, using official city and open data sources.
• Talk to lenders about down payment, reserves, and underwriting for 2 to 4 units and renovation loans.
• Get quotes for landlord and umbrella insurance and compare to standard homeowner costs.
• Build conservative cash flow projections that include vacancy, maintenance, capital expenses, taxes, insurance, and property management.

First steps and how we can help

• Pick your model. Decide whether your best fit is room‑by‑room, an ADU, a duplex to fourplex, or a licensed STR.
• Clarify budget and financing. Get pre‑qualified and learn the underwriting rules for your path.
• Target neighborhoods. Use the lists above to focus your search, then verify zoning and permit history on a short list of addresses.
• Underwrite the deal. Pull rent comps, map out expenses, and stress test cash flow.
• Inspect and plan. Confirm code and safety items, then map your renovation or operational timeline.

If you want expert backup from investor‑agents who do this work themselves, connect with Good Neighbor Realty. We combine hands‑on underwriting, regulatory know‑how, and post‑close support to help you buy with confidence. Get a free valuation and investment plan tailored to your house hack.

FAQs

Can I buy a duplex in Denver with an FHA loan?

• Yes. FHA allows owner‑occupants to purchase 2 to 4 unit properties if you plan to live in one unit and meet underwriting requirements. Speak with a lender about down payment and reserves.

Are ADUs allowed in Denver neighborhoods?

• Many are, but rules vary by lot and zone. Always confirm ADU eligibility, design standards, and permit steps with the city before you count on that rental income.

Can I use Airbnb for house hacking in Denver?

• Possibly. Denver requires licensing, tax registration, and in many cases that the STR be your primary residence. Verify rules for your address and any HOA before you list.

Do I need separate utilities for a legal rental unit?

• Not always. Separate meters simplify billing, but you can also use submeters or include utilities in rent. Check code and your utility options when you plan the layout.

How much rent can I expect to charge in Denver?

• Rents vary by neighborhood, unit size, finish level, and season. Pull recent comps from multiple rental sites and local property managers, then use conservative numbers in your projections.