Which one is better? House hacking or Investing + Renting?

Question

I am moving to Houston soon and would like to house hack or invest in real estate and rent. I am not sure which one will come out further ahead and be less risk for a newbie. I am 25 yo with about $150k saved up. Any advice?

Chris Sellers · Answer

Bryan,

Wow, great job saving $150k at 25!  You have lots of options.

I think house hack is better for a first timer, as long as your lifestyle can accept it.  So many benefits with living on site and getting the landlord experience.  You can get the best homeowner type loans and still write-off the rental property expenses.  I did this at your age with a duplex and it was a great experience.

Do your research, buy the place right and pick your tenants wisely.  Push the rent up as much as the market will allow.

Good Luck,

Chris

Eric C. · Answer

Plus house hacking a 2-4 unit will give you a better rate even if you convert it to a full rental in a year.

Ali Boone · Answer

Well I'd make it simple. Which option will be more profitable? You can just let the numbers decide.

• If you house-hack, what will be your monthly cash flow, if any? If negative cash flow, how much in expenses (especially mortgage interest) will you be paying?
• If you rent and buy a rental, how much will the cash flow on your rental bring in versus how much you are paying in rent?
• Then all the different numbers in between

Here's two articles that hit on house-hacking and renting while buying investments-

https://www.biggerpockets.com/renewsblog/considera...

https://www.biggerpockets.com/renewsblog/2014/01/1...

Hope those help!

Which one is better? House hacking or Investing + Renting?

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