House hacking or out of state investing?

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House hacking or out of state investing?

Roman Kevilly
New to Real Estate · Brooklyn, NY · Member since 2025 · 1 post · 6 votes

Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.

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Melissa JusticeBusiness Member
Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
1y

@Roman Kevilly,

Hey!

I’m originally from the Bronx and grew up in New Jersey myself and know that market pretty well. It’s a tough place to get strong cash-flowing deals, especially with high taxes and competition driving up prices. A house hack in NJ can still be a great learning experience if you’re set on being local and hands-on—but if you're open to other options, investing out-of-state can open up much better returns.

One path a lot of investors (myself included) have looked into is turnkey rental properties. These are fully renovated & professionally managed. It’s a solid way to start building passive income without having to swing a hammer or manage a renovation from a distance.

You’ve got a strong foundation with low rent and some savings—perfect setup to either house hack or go turnkey. Happy to share more if you're curious about that route!

Best of luck,

Melissa 

[email protected]313-221-8718
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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Roman Kevilly

    house hack.  there's just not even a comparison.  every day there is a post like this:

    ROUGH start. Sewer line repair plus forced added second water line for duplex?

    0Reply
  • Carlos Marin
    Realtor · Austin, TX · Member since 2024 · 22 posts · 15 votes
    1y

    I would choose house hacking for my first deal, every time. Way less risk, learn without braking the bank, more options. Good luck!

    0Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Hey Roman, I'd say house-hacking is one of the best ways to get into real estate investing. You’re able to learn the basics of a real estate investment with lower risk and build equity at the same time.

    Being able to purchase a property with only 5% down means you can leverage your money way more effectively. When you’re investing with leverage, I think it makes more sense to do it in a market that’s showing plenty of signs for growth.

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    • Ryan Randall
      NH · Member since 2016 · 56 posts · 73 votes
      1y
      Quote from @Samuel Diouf:

      Hey Roman, I'd say house-hacking is one of the best ways to get into real estate investing. You’re able to learn the basics of a real estate investment with lower risk and build equity at the same time.

      Being able to purchase a property with only 5% down means you can leverage your money way more effectively. When you’re investing with leverage, I think it makes more sense to do it in a market that’s showing plenty of signs for growth.


       Lots of wisdom in this post.

      1Reply
  • Rick BorgoBusiness Member
    Lender · NJ · Member since 2021 · 54 posts · 18 votes
    1y

    House Hacking in NJ is a great idea because multifamily in NJ will almost always have stable rent due to it being a "commuter state" - I worked with two separate clients that house hacked in Harrison, NJ and Rahway, NJ that both took advantage of Fannie Mae's 5% down Multi Family House Hack loan. 

    As long as you buy in an area that will rent (because in house hacking, this is not a long term residence for you), I think you will be good. Feel free to reach out if you'd like to talk more about the mortgage aspect of it. 

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  • Melissa JusticeBusiness Member
    Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
    1y

    @Roman Kevilly,

    Hey!

    I’m originally from the Bronx and grew up in New Jersey myself and know that market pretty well. It’s a tough place to get strong cash-flowing deals, especially with high taxes and competition driving up prices. A house hack in NJ can still be a great learning experience if you’re set on being local and hands-on—but if you're open to other options, investing out-of-state can open up much better returns.

    One path a lot of investors (myself included) have looked into is turnkey rental properties. These are fully renovated & professionally managed. It’s a solid way to start building passive income without having to swing a hammer or manage a renovation from a distance.

    You’ve got a strong foundation with low rent and some savings—perfect setup to either house hack or go turnkey. Happy to share more if you're curious about that route!

    Best of luck,

    Melissa 

    [email protected]313-221-8718
    4Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    If you're living in a rent-controlled apartment with low overhead, you're in a great position to start investing strategically. A house hack in New Jersey could be a strong first move. It keeps you local, gives you hands-on experience, and allows you to take advantage of owner-occupied financing. However, if the numbers in NJ don’t offer strong enough returns or the price points are too high, buying out-of-state in a more affordable market can give you better cash flow and potentially allow you to scale faster. The best choice depends on your long-term goals: if you're focused on learning and building locally, go with the house hack; if you're comfortable building a team remotely and want better returns, consider an out-of-state rental.

    [email protected]614-490-1163
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  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 498 posts · 553 votes
    1y
    Quote from @Roman Kevilly:

    Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.


    If you can afford to invest locally, then I'd suggest doing that with a duplex or a triplex to get your feet wet and learn what it's like to own / manage a property. You'll learn A LOT from your first buy and should do the best you can to start your investing on a good foot. 

    If that's not a feasible option then out of state might be a good substitute. I'd target a landlord friendly state where the numbers make sense and you're able to have all of your expenses covered while building equity. Lot will also depend on your overall strategy (cashflow vs appreciation). 

    Happy to answer any OOS investing questions since that's how I got started back in 2021! Good luck with your investing journey! 

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  • Mohammed Rahman
    Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
    1y

    Hey, sounds like you're in a great spot—living cheap in a rent-controlled apartment in Brooklyn while stacking cash is a solid foundation.

    If you’re deciding between house hacking in New Jersey vs. buying out-of-state, here’s a simple way to look at it:

    New Jersey house hack: You’d live in one unit and rent the rest, which helps cover your mortgage while you stay close to home. You'll be hands-on, which is perfect for learning the ropes. Property values are higher, but the cash flow might be tighter. Still, appreciation and equity growth could make up for it. And if you're commuting or tied to NYC for work, this keeps things practical.

    Out-of-state rental: You’ll get a cheaper property with better cash flow potential, but you’re managing from a distance unless you hire a property manager. Less hands-on experience and more risk if you’re new. It can still work if you have a team on the ground (agent, contractor, manager), but it’s not as beginner-friendly.

    If this is your first deal, I’d lean toward the New Jersey house hack. You’ll learn a ton, live in the property, and be able to manage things more closely. Once you’ve got that under your belt, then start looking into scaling with out-of-state properties.

    0Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    1y
    Quote from @Roman Kevilly:

    Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.

    Hi Roman, NJ House Hacking is great way to.  My wife and I got to Financial Independence leveraging house hacking strategies. Towns with direct line transit to NYC has been a blessing.  As to investing out of state or house hacking I can say house hacking is hands down one the best advantageous for investors.  For $50k you can get a $1m home owner occupying.  Anything you are not occupying will cost between 20-25% down meaning a $400k property out of state will cost minimum $100k to purchase.  

    Leveraging owner occupied loans allows you to scale faster along with reducing your monthly expenses.  Moving property to property using 5% down loan is doable for those looking to house hack.


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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    1y

    Hello @Roman Kevilly and welcome to the BP Forums!

    If you like your location and have all/most of what you need at your Brooklyn apartment, staying a bit longer is a good idea.

    You're likely paying rent well below what you'd be paying vs. househacking in Brooklyn... or Queens or The Bronx for that matter.

    The median sale prices for BK, Queens, and BX 2-3 family properties are $1.045M, $1.1M, and $888K respectively.

    The combined median sale price for these areas is $999K which brings you to a monthly mortgage payment of about $7,200 (assuming a 10% down payment).
    If you rent 2 units at $2,500 each and live in the other unit, you're paying $2,200/month not including other expenses which could bring your monthly total to over $3,000/month after vacancy, maintenance, utilities, capEx, and other expenses. You'd likely have to stay at the property for a few years to be able to move out and realize minimal cashflow. 

    Of course, these are just averages and projections so take them with a grain of salt.

    I agree with @Melissa Justice, anything in and around NYC (within 90 mins commute) will have a higher barrier of entry and less cash-flowing options. 

    Albany/Capitol Region, Other Upstate NY markets (i.e. Syracuse), Connecticut, and Pennsylvania are markets within 3-4 hours of NYC that could be worth looking into.

    If you don't plan on ever making a trip to these markets but still want cashflow, lower pricepoints, etc., consider Southern and Midwestern states.

    Lastly, syndications offer opportunities to invest more passively vs. OOS investing with property management in place. With syndications, you find a solid operator, learn about their upcoming deals and invest your capital without having to manage acquisitions, tenants, properties, operations, etc. 

    All the best!

    Abel

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    What can you afford where you are or close by in NJ?

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  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    I would definitely recommend starting with a house hack to get hands-on experience as a landlord. Managing a property you live in will teach you a lot about maintenance, dealing with tenants, and understanding cash flow.

    Once you're comfortable with that, you can look into out-of-state properties. When going that route, make sure you research markets with strong rental demand, population growth, job diversity, and landlord-friendly laws. It's also key to build a solid local team (agent, property manager, contractor) before buying. Out-of-state investing can be very rewarding, especially if you're priced out locally, but it works best when you're intentional about the market and have people you trust on the ground.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Roman Kevilly

    Great position to be in—low rent gives you flexibility. If you're open to managing tenants and living in the property, a house hack in NJ can build equity fast and keep you close to your investment. But if cash flow is your top priority and NJ prices are tight, buying out-of-state in a strong rental market (like parts of TX) could make more financial sense. Either way, prioritize learning the local laws, running solid numbers, and building a reliable team around whichever market you choose.

    Good luck!

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  • JooYung Choi
    Realtor · NJ · Member since 2023 · 215 posts · 99 votes
    1y

    Hey Roman,

    I currently invest in NJ and out of state. 

    Pros of investing in NJ:

    -Appreciation potential

    -Able to utilize a low down payment owner occupied loan

    -Proximity to NY

    Cons of investing in NJ:

    -Minimal cashflow for LTR

    -Property taxes

    -Not a landlord friendly state

    -Higher purchase price, lots of competition

    Pros of investing out of state:

    -Cash flow

    -Lower purchase price, lower property taxes

    -If buying an STR, bonus depreciation / amazing tax benefits

    Cons of investing out of state:

    -20% down payment for an investment loan

    -Out of state managing (you need a solid team)

    -If buying an STR, have to self-manage to get bonus depreciation

    -Minimal appreciation potential

    So I guess it really depends on what you are looking for. If you are a buy and hold investor, NJ appreciation is the way to go. If you are looking for pure cashflow, investing out of state will give you better returns. I will say if you are planning to buy out of state for a long term rental, I would recommend buying a NJ house hack instead.

    1Reply
  • Zach Howard
    Hong Kong · Member since 2024 · 161 posts · 57 votes
    1y

    House hacking is probably the best way to start in real estate from a risk-reward perspective. 

    If it's feasible for you, I'd 100% start there. 

    1Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    1y

    Well said @Zach Howard No matter the market you live in its tough to beat a House Hacking strategy. Even in a state like New Jersey, we have the highest taxes in the nation but we also have some of the highest rents. Not to mention those high taxes do not go away if you live in single family. One way or another if you know you need to live in a certain market and you want to start REI, its very rare to see a case where OOS is more beneficial.

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  • Anthony Angotti
    Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
    1y
    Quote from @Roman Kevilly:

    Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.


     Honestly, both? 

    Would you break even on the house hack in New Jersey, IMO house hacking is a no brainer almost anywhere, but it also depends if you like where you live and if you want to move. If you like where you live and it's cheap then there's no reason to move just for real estate. House Hacking is a great money decision, but also a personal living situation question just as much if not more. 

    If you invest in a market like Pittsburgh where I live and invest you can likely find something in the 100-200k range to get an out of state portfolio started, but you should know it's very much a get rich slow move and that you'll want to have a plan to grow in the area to make setting up an out of state team worthwhile. 

    I think it comes down mostly to if you like where you live and want to stay there, or if you are kind of indifferent and want to move to start your investment portfolio.

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  • Joseph Guzzardi Jr
    Rental Property Investor · Member since 2019 · 411 posts · 148 votes
    1y
    Quote from @Roman Kevilly:

    Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.


     House Hack. How much money can you realistically cashflow on an investment out of state? For arguments sake, lets say $600/mo (7200/yr) which is probably high. After repairs/maintenance and other items. The big time money is in the buy & hold and refi/sell down the road. Best to stay local and house hack in my opinion 

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