u/brinerbear

Most people run the numbers on a detached ADU and conclude Denver doesn't pencil. They're right about that specific scenario. A $300k build at $1,600/month rent is a 15+ year payback and that's before financing costs.

But that's not the only scenario and it's not the one most house hackers should be using.

Here's what the numbers actually look like on a basement conversion in the Denver suburbs:

Purchase: $525k duplex or SFH in Englewood or Thornton Down payment: $18,375 at 3.5% FHA owner-occupied Monthly payment at 6.15%: ~$3,100 Basement conversion cost: ~$85k at current contractor rates Rental income: $1,400/month Effective monthly housing cost: ~$1,450 after rent offset

For context, renting a comparable unit in the same neighborhood runs $1,800-2,000/month. You're building equity, paying less than rent, and the basement conversion pays back in roughly 5-6 years rather than 15+.

The mistake people make is comparing detached ADU construction costs to rental income in isolation. The relevant comparison is total housing cost with vs. without the rental offset — and that math is completely different.

Colorado also passed HB 24-1152 last year which removed most of the zoning barriers that used to make this complicated. The remaining friction is construction cost and permit timelines, which vary a lot by city.

Curious what others are seeing on basement conversion costs outside Denver — are numbers similar in other metros?

Denver gets written off a lot in real estate investing circles because of the price point. But I've been digging into whether house hacking actually pencils at current prices and rates and the answer is more interesting than I expected.

Quick breakdown on a realistic scenario:

Purchase: $525,000 duplex in Englewood

Down: $18,375 (3.5% FHA, owner-occupied)

Monthly payment at 6.15%: ~$3,100

Rent from second unit: ~$1,650

Effective housing cost: ~$1,450/month

For comparison, renting a comparable unit in the same area runs $1,800–$2,000. You're building equity and living cheaper than renting.

The other piece that changed the calculus: Colorado HB 24-1152 (effective June 2025) essentially made ADUs legal everywhere in the metro. So even a single-family purchase has a path to adding a rental unit — basement conversion runs about $150/sqft here, or $60–90k for a typical unit.

Not trying to oversell it — permit timelines in parts of Arapahoe County are brutal (12–18 months) and construction costs are still high. But for someone planning to owner-occupy anyway, the numbers work better than the headlines suggest.

Anyone else running Denver deals right now? Curious what you're seeing on the ground?

Most of the conversation about housing costs in Denver focuses on what you can't control (rates, prices, inventory). But something pretty significant changed on June 30, 2025 that most homeowners missed.

HB 24-1152 now requires every city in the Denver Metro to allow one ADU on any single-family lot as a permitted use by right. No public hearings, no rezoning, just administrative approval. HOAs can no longer ban them outright either.

The practical effect: if you own a home in Denver, Aurora, Lakewood, Arvada, Englewood — almost anywhere in the metro — you can now legally build a rental unit on your property that wasn't possible 18 months ago.

At current Denver rents ($1,200–$1,800/month for a 1-bed), that's a 30–60% reduction in your effective mortgage payment.

Curious if anyone here has actually pulled permits under the new rules yet. Hearing timelines are all over the place depending on the city.