House‑Hacking in Boulder After the Occupancy Repeal

Thinking about offsetting your mortgage in Boulder by renting out rooms? With the city moving away from a fixed cap on unrelated roommates, house‑hacking just became more flexible. That flexibility does not replace safety, zoning, and contract rules you still have to meet. In this guide, you will learn what changed, how to vet a property, how to run conservative numbers, and how to set up leases and house rules that protect your investment. Let’s dive in.

What changed in Boulder

Boulder shifted from a hard cap on unrelated occupants to standards centered on health, safety, and habitability. The goal is to prevent arbitrary limits while keeping public‑health protections in place. For you, that generally makes roommate strategies easier to pursue.

You still have to follow building and fire codes, health standards, zoning and land‑use rules, and any HOA restrictions. If you plan to mix long‑term roommates with short‑term guests, short‑term rental rules may also apply. Mortgage and insurance contracts can set their own limits too.

What it means for buyers

Removing the number cap is necessary but not sufficient. You should confirm that a specific home can safely and legally support your intended number of housemates. Focus on egress, detectors, plumbing capacity, bedroom legality, rental registration, HOA clauses, and lender and insurer requirements. If any one of these fails, it can limit your plan.

Due diligence checklist

Below is a practical list to work through from offer to closing. Verify items with City of Boulder Planning & Development Services, Boulder County Public Health, your lender, insurer, and legal counsel.

Code and inspections

• Confirm the certificate of occupancy and check for open permits or violations.
• Verify that each intended bedroom meets code for egress, ceiling height, and ventilation.
• Check smoke and CO detector placement, egress routes, and any required fire separations for conversions or ADUs.
• Ensure plumbing and sanitation can support the planned occupant count.

Zoning and registration

• Confirm zoning allowances for room rentals, accessory dwelling units, and any planned conversions.
• Check whether rental registration or inspections are required for long‑term room rentals.
• If short‑term stays are part of your plan, review local short‑term rental rules before you list anything.

HOA and covenants

• Request the full HOA rules and review clauses on rentals, occupant limits, parking, and guest policies.
• Remember that HOA restrictions can be tighter than city rules.

Financing and insurance

• Disclose rental intent to your lender and confirm owner‑occupancy and room‑rental allowances.
• Ask your insurer if you need a landlord policy or endorsements for multiple unrelated tenants.
• Discuss tax implications of rental income and, if relevant, how future strategy changes could affect taxes.

Landlord‑tenant law

• Follow Colorado rules for deposits, notices, and repairs.
• Use consistent, documented screening criteria that comply with federal and state fair‑housing law.
• Understand local eviction timelines before you need them.

Inspect for shared living

Target features that make roommate living safe, comfortable, and code compliant.

Safety and code items

• Verify egress windows or doors in every bedroom and clear exit routes.
• Confirm smoke and CO detectors are installed correctly and test them.
• Evaluate electrical capacity, panel condition, GFI protection, and overall load.
• Check HVAC sizing and zoning to support multiple closed doors and varied preferences.
• Test water pressure, hot‑water capacity, and drain performance.
• Look for moisture issues, past leaks, mold, or pests, especially in basements.
• Review stair safety, handrails, and lighting in entries and common areas.

Layout and function

• Count legal bedrooms and check size and privacy; consider keyed bedroom hardware where allowed.
• Assess bathroom ratio and the cost to add a half bath if needed.
• Review kitchen size, appliance condition, and storage for multiple users.
• Plan for laundry capacity, bike storage, and functional common areas.
• Evaluate on‑site and street parking, and understand any permit rules.

Conversion potential

• If you plan to finish a basement, convert a garage, or add an ADU, confirm if it is allowed and what permits are needed.
• Price out code upgrades such as egress windows, fire separations, or plumbing expansions.

Model rent and utilities

Build conservative projections that reflect shared‑housing realities. Collect historical utility bills when possible and model both average and high‑use months.

Costs to include

• Fixed housing costs: mortgage principal and interest, property taxes, insurance, HOA dues.
• Variable recurring costs: electric, gas, water and sewer, trash, internet, landscaping or snow removal, and cleaning for common areas.
• Operating costs: management (self or paid), repairs and maintenance, replacement reserves for big items like roof or HVAC, supplies.
• Vacancy and turnover: months vacant plus cleaning and touch‑ups between tenants.
• Taxes: rental income reporting and any local obligations if you include short‑term stays.

Utility split options

• Per‑bedroom flat split: simple and predictable, divided equally among bedrooms.
• Proportional allocation: based on bedroom size or private square footage.
• Base plus per‑person: you cover a base level, and roommates share usage above that or pay a per‑person fee for high‑use utilities.
• Submetering or individual billing: most precise, but installation and approvals may be required.
• Practical tip: use the highest historical winter bill in your modeling and a cushion for usage spikes.

Key return metrics

• Net monthly cash flow: rent collected minus mortgage, taxes, insurance, HOA, utilities, management, maintenance reserve, and vacancy.
• Break‑even occupancy: the minimum number of rented rooms needed to cover carrying costs.
• Return metrics: cash‑on‑cash return and cap rate if you convert to a full investment; test sensitivity to vacancy and utility increases.

House rules and screening

Clear rules and consistent screening protect property condition and neighbor relations.

Lease structures

• Joint lease: everyone signs one lease and shares liability. Management is simpler, but enforcement can be harder if one person defaults.
• Individual room licenses: separate agreements for each room with shared common areas. You retain more control but manage more paperwork.
• Set guest and subletting policies to prevent quasi short‑term activity that can trigger complaints.
• Define quiet hours, smoking, and pet policies in writing.
• Use move‑in condition reports with photos and document deposit handling.

Screening best practices

• Use standardized applications and written criteria such as income thresholds, rental history, and references.
• Verify income and prior tenancy. Run credit and background checks consistent with fair‑housing guidance.
• Require renter’s insurance and list the owner as an additional interest where appropriate.

Protect the property

• Use move‑in and move‑out checklists, signed by all parties.
• Schedule regular inspections with proper notice to catch issues early.
• Keep a repair response policy and a short list of trusted contractors.
• Limit alterations without written approval.

Manage risk and neighbors

Being proactive reduces costs, complaints, and surprise inspections.

Insurance and liability

• Confirm your policy covers room rentals; switch to or add landlord coverage if needed.
• Consider an umbrella policy if you plan for higher occupant counts.
• Know any local registration requirements and the penalties for noncompliance.

Handle complaints

• Share your contact info with neighbors and your HOA when appropriate.
• Enforce quiet hours, parking rules, and trash protocols consistently.
• Keep written records of complaints and your corrective actions.

Health and safety

• Test smoke and CO detectors on a schedule and replace batteries.
• Provide adequate lighting and secure entry areas; consider deadbolts on bedrooms where allowed.
• Address moisture, mold, and pest issues quickly. Use dehumidification in basements when needed.

Next steps in Boulder

• Before you offer: request disclosures about permits, any code issues, HOA rules, prior neighbor complaints, and utility history.
• Under contract: order a comprehensive inspection and confirm bedroom legality, egress, HVAC capacity, and electrical load.
• Consult the right team: a local attorney for landlord‑tenant and municipal rules, your insurer for policy changes, and your lender for occupancy terms.
• Set up operations: choose your lease structure, draft house rules, prepare applications, and create move‑in checklists.
• Build a reserve: fund a cushion for repairs and run cash‑flow projections with conservative assumptions.
• Check with City of Boulder Planning and Building and Boulder County Environmental Health for any registration, inspection, or complaint history.

If you want a clear, step‑by‑step plan tailored to your budget and timeline, reach out for a quick strategy session. A few smart checks up front can turn your Boulder house‑hack into steady, simple income. Connect with Unknown Company to get started.

FAQs

Is it legal to rent rooms to unrelated people in Boulder now?

• Generally yes under the new health and safety approach, as long as you comply with building codes, zoning, HOA rules, and your mortgage and insurance terms.

How many roommates can I have under the new rules?

• There is no simple fixed number; appropriate occupancy is evaluated using health and safety standards like egress and sanitary facilities, so verify with local officials for your specific home.

Do I need a rental license for room rentals in Boulder?

• Check current rental registration or inspection requirements with the City of Boulder, and remember that short‑term rentals have separate rules.

How should I split utilities in a roommate house?

• Choose a method that fits your setup, such as equal per‑room splits, proportional by room size, base plus per‑person, or submetering for maximum precision.

Will my mortgage or insurance change if I house hack?

• Possibly; disclose your plan to your lender and insurer, since some owner‑occupancy loans and standard policies limit room rentals without adjustments.

What inspections should I do before closing for house‑hacking?

• In addition to a full home inspection, confirm legal bedrooms, egress, detector coverage, electrical capacity, HVAC sizing, plumbing adequacy, and any permit history.