Should I First House Hack or Purchase an Investment Property?
Hello BP community,
I would like to start by introducing myself a bit. I'm in my mid-20s, I live in NYC and currently work as a property manager for a medical institution that is continuously expanding their real estate portfolio consisting of luxury high rise apartments. As a property manager I have learned a lot from a landlords perspective. Just to name a few such as interacting with tenants, dealing with complex situations, documenting leases, being a handyman and turning over apartments for the next tenant. I sure have learned a lot and my experience has expanded from my job but that doesn’t make me a “landlord expert” by any means. I continue to learn every day and I am grateful for the BP community where I learn something new every day. I tend to over analyze but, now I'm ready to make it happen as there’s no better education than experience with trial and error.
The market in NYC is pretty high to say the least so I've been studying markets outside the area within a 2 hour drive such as:
Essex County, NJ(Newark, East Orange, Irvington)
Lehigh Valley, PA(Allentown, Easton, Bethlehem)
Connecticut( still learning markets)
Now here's the dilemma I'm currently facing which would also define with what market I should pursue. If I go with an investment loan I'll have higher interest rate, closing costs, 6 month reserve, 75% LTV bringing my upfront cost a lot higher than house hacking. By house hacking I'll qualify for owner occupied(FHA,conventional) benefits with lower interest rate and upfront cost, etc. Doing so will eliminate the idea of house hacking in PA because of the distance with it being just over 2hours and 90 plus miles from work. I must say I don't necessarily need to house hack as my job offers me a place to stay for nearly free but, I also wouldn't mind having a place away from work. If I house hack I plan to turn a basement unit into a living space. I won't be staying there all the time which also leaves opportunity to possibly air bnb the unit for the days I'm stuck at work. I plan to make the property strictly rental after 2 years and I have read that places like Newark, NJ have strict tenant friendly laws(major red flag). Which makes me second guess areas such as those.
I really HIGHLY appreciate any feedback as like I said I am still learning.
Please respond with any thoughts or suggestions.