Should I expect cashflow on my first house-hacked property?

5 Replies

Hey, there!

I'm hoping to get your opinion on this I found a property that I can live in while renting out a basement and another unit (House is a duplex with a basement). When I calculated my cashflow, it came out as a negative amount. So, I would still need to pay about 1/2 of the remaining expenses. I am still thinking about going this route to get more hands-on experience while also saving a ton of money from my current apartment lease. I'd put those savings towards a second property investment that would actually generate positive cash flow since having more capital would allow me to get a lower mortgage payment (while still taking into consideration my CoCROI %).

Am I going down the right road or do you have other suggestions?

Any feedback is truly appreciated!

Thank you,

Diego Furlan

@Diego Furlan I always tell my clients here in the Chicago suburbs to analyze the house hacks as though they are not living in the property. This shows them whether there is a path to profitability when they move out some day. In the mean time, you will probably have to pick up some of the expenses if you are accounting for maintenance, CapEx, and utilities, but as you mentioned you are still seeing a substantial cost of living reduction. Just make sure the place would cash flow well when you move out some day.

I agree with John.  Look at it from the perspective if it was entirely rented out.  Also look at how much you are paying now for rent vs what your costs would be living in the house.  I'm sure some people can live in and rent out their house and cash flow, but that is not the norm.

Originally posted by @Diego Furlan :

Am I going down the right road or do you have other suggestions?

I agree with the opinions you've received thus far.  My only add:  Make sure you can afford to keep up your payments for the short amount of time you have a vacancy.  Renters eventually move. If your positive cash flow goes negative because of a short vacancy make sure you have reserves to cover it.