House Hacking: Duplex Unit vs. Single Family Rooms
As a first time home-buyer and new investor I have been looking to purchase a duplex using FHA and occupy one unit while renting out the other to help cover mortgage payment and gain experience as a landlord.
However, I'm not finding very many multi-family properties on the market in the metro Detroit area... and none that make much sense from an investment standpoint.
Does it make more sense to look for a 3 or 4 bedroom single-family home and rent out the extra rooms to some roommates?
I'm looking for some advantages/disadvantages to both strategies. Any advice is appreciated!
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- Rental Property Investor
- Baltimore County Maryland and Tampa Florida
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Just don't mention to the lender about your plan to rent rooms. And be sure you're purchasing a property (SFH or multi) that you can afford even if there are no renters!
We rented out 1-2 extra rooms in our house for years. It went pretty well. We did of course claim the rental income on our taxes. We also had written leases with each tenant. They had to pay security deposit and first month rent to be able to sign the lease and move in.
For renting out rooms, I recommend doing month-to-month leases so that if things don't work out, you can more quickly have them move out. This is your house, and you should be comfortable.