House Hack or Multi Unit??

6 Replies

I live in South Florida. Right now duplexes are going for a minimum of $300K in a good area and all of them are pretty much out dated and need work. Most of them don’t even meet the 1% rule. The ones I do find go quickly. Now on the other hand I could buy a single family 3/2 and rent out the other two rooms for $800-$900 and it would cover 75% of the mortgage. Most importantly I would be saving close to $1000 a month on my current rent. And these properties are newly remodeled. Either way my goal is to save $1000 a month, so does it really matter which option I choose because you don’t get rich on your first property.

The difference is with a multifamily you have your own living quarters whereas with a single family you would be sharing the kitchen, living room and all common space with your tenants.

@Maurice Lightner - I vote for the house larger than you need and renting rooms. In my area that means better houses in better neighborhoods that appreciate more. At 25 I bought a split level 5/3 near Washington DC and rented out the upstairs 4 rooms and lived in the lower level. Paid all the mortgage (1600) and utilities and gave me an extra $2-500 cash in my pocket. And I was living for free. I even wrote off taxes some of my common area furniture expenses (TV, couch, etc.). If you go this route, recommend clear written leases, same gender as you, setting clear chores/cleaning schedules, and such. Don’t rent to friends and keep increasing rental prices. My rooms were furnished so I got renters quickly and could also Airbnb when empty. Generally you’ll have to do all landscaping, pay for intermittent house cleaning, etc. Room rental tenants don’t stay for more than 12-24 months whereas people stay in apartments for long periods sometimes, so it’s more management.

@Maurice Lightner It depends. All things being equal, I would go with the separate living arrangement of a duplex, but I'm almost 50 with a wife and child. Some things to consider with house hacking. Don't discount short term or executive (30 days or longer) rentals of the hacked space. If the area you live in allows it, it can be very lucrative and not as much work as most people think, once you get your systems in place.

Originally posted by @Maurice Lightner :
I live in South Florida. Right now duplexes are going for a minimum of $300K in a good area and all of them are pretty much out dated and need work. Most of them don’t even meet the 1% rule. The ones I do find go quickly.

Now on the other hand I could buy a single family 3/2 and rent out the other two rooms for $800-$900 and it would cover 75% of the mortgage. Most importantly I would be saving close to $1000 a month on my current rent. And these properties are newly remodeled.

Either way my goal is to save $1000 a month, so does it really matter which option I choose because you don’t get rich on your first property.

Hi Maurice, house hacking or multifamily is a great way to get involved in Real Estate. If you are able to save $1,000 a month on rent you can't go wrong. There are pros to the multifamily of each tenant having their own living space and no shared bathrooms/kitchen. It will come down to your preference.