The Side Hustle Show

721: $1k a Month with your First Co-Living Property

February 5, 2026

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  • Co-living, which involves renting out individual rooms in a large house, can generate 4-5 times the cash flow of a traditional single-family rental, often aiming for \$1,000 to \$2,000 per month per property. 
  • To navigate zoning restrictions limiting unrelated occupants, a common workaround is structuring the arrangement as a private club where the entity rents the house and members gain usage rights, rather than traditional leases. 
  • Successful co-living property acquisition prioritizes large square footage (e.g., 1,500 sq ft for four bedrooms) in working-class neighborhoods (B- or B+ areas) near major employers, while avoiding HOAs and properties with pools. 
  • The critical step for success in any side hustle, including co-living, is to choose one path and then apply "blinders" by stopping the consumption of information about alternative options. 
  • Sam Wegert offers a free 5-Day Co-Living Challenge at scaleyourrealestate.com to provide listeners of The Side Hustle Show with the necessary training to start a co-living home. 
  • Host Nick Loper emphasizes the danger of constantly seeking new opportunities and reinforces the importance of committing to a chosen path, like co-living, until it succeeds or fails. 

Segments

Co-living Cash Flow Potential (Unknown)
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  • Key Takeaway: None
  • Summary: None
Converting Homes to Co-living
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(00:02:48)
  • Key Takeaway: Square footage dictates potential room count, with a formula suggesting one extra room for every 250 square feet over 1,500 sq ft.
  • Summary: The key to maximizing rooms is square footage, as dining rooms, living rooms, and basements are converted into private spaces by adding walls and closets. For example, a 2,000 sq ft house is projected to yield six bedrooms. Ground-up construction allows for exact customization, but most conversions require adding internal walls and sometimes bathrooms.
Zoning Workarounds via Club Structure
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(00:05:05)
  • Key Takeaway: Cities often restrict the number of unrelated occupants, which is circumvented by forming a private club entity that rents the house, rather than individual leases.
  • Summary: Outdated zoning rules often limit occupancy to two unrelated people, but this structure allows for more residents by framing the arrangement as a private club. This club entity rents the property, and the residents become members who are granted usage rights. Colorado recently made it illegal for local jurisdictions to regulate the number of unrelated adults in a home.
Geographic Selection Criteria (Unknown)
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  • Key Takeaway: None
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Financing and Startup Costs (Unknown)
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  • Key Takeaway: None
  • Summary: None
Property Criteria Checklist (Unknown)
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Tenant Rent Pricing and Vetting
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(00:20:42)
  • Key Takeaway: Room rental rates typically fall between 70% to 80% of the local market rate for a studio apartment, and vetting involves background checks, eviction history, and a vibe check interview.
  • Summary: The income requirement for tenants is often set at 2.5x to 3x the rent, though lower multiples are considered for minimum wage earners or those on fixed incomes. While singles are preferred, couples are allowed if they pay extra and occupy a room with a private bath, but children are prohibited. Common areas are furnished, but personal items are strictly limited to labeled shelves in the kitchen/fridge to maintain cleanliness, enforced by regular professional cleaners.
Managing Conflict and Turnover
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(00:29:00)
  • Key Takeaway: While community building is a goal, conflict is common, necessitating clear house rules (e.g., no weapons, no Bitcoin mining) and systems like common area cameras to resolve disputes.
  • Summary: Conflict ranges from minor issues like stolen food to serious incidents like false accusations of violence or drug use, requiring swift action to maintain home harmony. Systems like 24/7 cameras in common areas help resolve disputes objectively, and rules must be established upfront regarding utilities and prohibited activities. A 12-month term is typical, and a 40% renewal rate after three years suggests long-term viability for good members.
Scaling to Passive Management
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(00:37:54)
  • Key Takeaway: Scaling beyond the first few properties is best achieved by hiring specialized property management, as co-living management is significantly more intensive than traditional rentals.
  • Summary: Property management for co-living homes with six or more residents typically costs 15% to 20% of the rent roll due to the complexity of handling multiple member concerns and maintenance issues. The speaker built his own management company out of necessity during the first eight years, but now third-party managers exist who can handle the nuances of multi-resident properties.
Mission and Impact of Co-living
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(00:43:54)
  • Key Takeaway: Co-living serves a critical need by providing housing options cheaper than the market’s lowest-priced alternatives, directly addressing America’s 7.3 million affordable housing unit shortage.
  • Summary: Investors are creating housing options for underserved populations, unlike the focus on luxury apartments, which is heartwarming alongside financial returns. Furthermore, by bringing people together, co-living combats social isolation, which the Surgeon General equates to smoking 15 cigarettes a day.
Final Tip: Choosing Focus
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(00:46:37)
  • Key Takeaway: Overwhelmed listeners must lock themselves in a room to choose one side hustle and then apply ‘blinders’ to ignore noise from other opportunities.
  • Summary: When faced with overwhelming options, the key is to commit fully to one path, such as co-living, until it succeeds or fails. This commitment requires intentionally stopping the consumption of information about alternative ventures like Airbnb or storage facilities. This focused approach is what supported the guest’s success in his chosen field.
Co-Living Free Challenge Offer
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(00:47:26)
  • Key Takeaway: A free, live 5-day Co-Living Challenge is available at scaleyourrealestate.com, offering about 10 hours of training to prepare attendees to jump into a co-living home.
  • Summary: The guest promotes a completely free, no-purchase-necessary 5-day challenge hosted live by him. This event provides comprehensive training on co-living, totaling approximately 10 hours of instruction. Completing the challenge equips participants with everything needed to begin their first co-living property venture.
Host Reflection on Focus
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(00:47:53)
  • Key Takeaway: The host agrees that the ‘choose and then blinders’ strategy is vital to prevent distraction from other appealing side hustles, like vending machines.
  • Summary: The host acknowledges the danger of being tempted by other profitable ventures discussed on The Side Hustle Show, such as vending machine routes, when already committed to a primary hustle. He validates the advice to pick a lane and stick to it, recognizing that countless paths to income exist, but decision and execution are paramount.
Real Estate Playlist Resource
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(00:48:23)
  • Key Takeaway: Listeners interested in real estate side hustles can access a curated playlist of relevant Side Hustle Show episodes covering land investing, Airbnb co-hosting, and house hacking.
  • Summary: The episode concludes by directing listeners to a free, personalized money-making playlist focused on real estate side hustles. This collection covers various strategies discussed previously, including rental arbitrage, creative financing, and house hacking. The playlist is accessible via the show notes link at sidehustlenation.com/slashco-living.