What do you wish you knew before buying your first property?

Question

I'm currently 23 and have access to around 40k liquid to buy a home when my lease is up in March of 2025. I want to buy a house-hacking property or duplex around the SoFlo area, but I'm wondering it it could be a better idea to invest OOS in Huntsville Alabama where I could afford a quadplex or something of that measure. General advice is welcomed as well but what would you plan to do in my scenario?

Zion Bar · Answer

if ure 23 and single - house hack 100% get a multi unit live in one rent out the rest

cant afford multi - buy 1 SFH, multpile bedrooms - sleep in 1 rent out the rest of the rooms

Jonathan Greene · Answer

I agree with everyone on house hacking as a much smarter first purchase because you will get landlord experience and learn to understand cap ex. But one thing no one is telling you is that 15k of your 40k liquid needs to go to reserves. So you have 25k to play with right now, not 40k. Consider that when you decide on timing to buy and affordability, as well as the insurance costs and flood risk in South Florida.

Gregory Schwartz · Answer

@Mitchell Kosek This is crazy—I went through the exact same situation! Back in 2018, I bought a duplex in Huntsville. It felt like a huge risk because I wasn’t familiar with the area and wasn’t great at screening agents or property managers. After two years of negative cash flow (mostly due to an expensive turnover), I decided to sell it.

Guess what I did next? I house hacked—and it was a game changer!

I no longer own the Huntsville property, but that house hack was the first step toward what is now a portfolio of 26 units here in College Station, TX.

100% house hack!!!

Wale Lawal · Answer

@Mitchell Kosek

House hacking in South Florida (SoFlo) offers cost reduction, appreciation potential, and local management, but may limit properties and require FHA loans. Huntsville, Alabama offers cash-flow opportunities, lower property prices, and better cash flow due to rent-to-price ratios. Key considerations include involvement, cash flow vs. appreciation, and financing options. Explore options, analyze properties, and network with local investors. It's essential to determine your long-term goals and decide whether cash flow or long-term appreciation is more important.

Good luck!

Ash Hegde · Answer

Agree with the others, house hacking is a great first step. The rent will offset the cost of your primary which allows you to save faster for the next one, plus it can become a rental property when you move out. Run the numbers and make sure it will support itself when you are gone.

Theresa Harris · Answer

Invest in a place you know.  Also talk to the bank to find out what you can borrow for a mortgage.

Don't over extend yourself.

Don't buy the cheapest place, think long term-buy in a good area.  You can always add a coat of paint, replace kitchen cabinets, but you can't move a house (well you can, but that's another thread!).

If you are house hacking, think about number of bathrooms, size of bedrooms and layout of the kitchen (can more than two people work in there at once and is there enough storage)?

No place is perfect. Buy one that works for you.

Michael Dumler · Answer

@Mitchell Kosek, if you can afford to buy in your market, without question, you should explore house hacking before investing out of state. Moreover, think long-term. While we don't have a crystal ball, most would agree that all things being equal, the property in Southern Florida will be more valuable than a quadplex in Huntsville, Alabama, ten years from now. Furthermore, you'll obtain better financing rates/terms with a primary home loan than with an investment mortgage product.

To get the ball rolling, connect with an experienced house hacker and investment-focused real estate agent in your market ASAP. Good luck!

Ray Hage · Answer

First, it's great that you're trying to get out of the rental market so young. I would say the answer depends on a few things. I currently househack in Fort Lauderdale and I would very strongly recommend it especially for starting out. You'll save money on your living expenses, get some landlording experience and be able to keep an eye on the property.

If you plan to live in south FL for the long term, you're probably going to be better off starting out with a house hack. If you're planning to move around often, I would probably say continue renting while investing in Huntsville (assuming you really understand the dynamics market). I am a realtor in FTL and investor managing my own properties. If you want to connect, I could advise a bit further.

V.G Jason · Answer

This really depends on where you're starting out. But the first thing is, you definitely need to be in a position of strength. This is not only financially but also legally.

From there, you can proceed. Make sure your back is wide enough to cover your own, and the floor is not that far from your comfort levels. Psychologically, we're more in distress with losses than we are in euphoria with gains. So your mind needs to be right, too.

What do you wish you knew before buying your first property?

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