Best Place to House Hack for Software Engineer?

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Best Place to House Hack for Software Engineer?

Kamil Kisielewicz
New to Real Estate · San Jose, CA · Member since 2020 · 18 posts · 4 votes

Hi All,

I'd like to start by saying thank you to anyone taking the time to read this post and reply! This is my first post on BiggerPockets. I've been reading financial books on real estate and stock investing. I just finished reading Set For Life, and I'm extremely inspired to take control of my financial future. I'm currently going to be interning at Amazon and NVIDIA during the second half of 2021 in Software Engineering.

Looking further ahead, since I'll be making around 150k before taxes, I want to make sure that 15-20k doesn't get eaten so I can reduce rent expenses. However, the Bay Area, where I currently live, has crazy high house prices. 

Therefore, I'm looking into Seattle, Austin, and Raleigh-Durham to move into after college and house-hack. These markets also seem to be pretty tough to pull off a house hack in, but the midwest properties (which seem to be more house-hack friendly) don't have tech hubs that are nearly as booming.

Which city should I be looking into as a new grad in Software Engineering to start my real estate journey?

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Daniela Andreevska
Real Estate Consultant · Member since 2020 · 44 posts · 71 votes
5y

Hi, @Kamil Kisielewicz!

Now is a really great time to house hack as a software engineer. I assume that with your profession you can work remotely, which means that you should go after the most profitable (and affordable) market for real estate investing. For the cities which you've listed, I would recommend that you look into Raleigh-Durham. The PwC and Urban Land Institute 2021 Emerging Trends in Real Estate: US and Canada report (which is a very prestigious and trusted publication in the real estate investing industry) ranked Raleigh-Durham as the #1 market for overall real estate perspectives in the coming year.

Our analysis of the most recent data shows that property prices are relatively affordable in Raleigh with a median value of $447k. Affordability is an important factor for someone who is just getting started in real estate, like you. Moreover, according to our data, the average cap rate for traditional properties in Raleigh is 2.2%. I know that this doesn't like a lot, but when compared to nationwide city averages and the average values in other top markets for long-term rental properties, it is actually one of the highest values across the nation. This is just an average city-level metric which indicates that Raleigh overall is a great place to invest in real estate at the moment. Of course, when choosing a specific property, you have to conduct detailed investment property analysis to optimize your return while staying within your budget.

If you are open to other locations, I can make a few suggestions as we've recently looked at the best locations for investing in small multifamily properties which is what you will be looking at for house hacking. Some top markets for buying a duplex or trplex to rent out on a long term basis at the moment include: Manchester, NJ; Napes, FL; Cincinnati, OH; Fort Wayne, IN; Detroit, MI; Baltimore, MD; Cleveland, OH, Syracuse, NY; Akron, OH; and Rochester, NY. These are the locations which offer the highest return for small multifamily properties.

Please feel free to ask any questions you might have about these markets or anything else.

Good luck with your first investment!

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  • Kamil Kisielewicz
    OP
    New to Real Estate · San Jose, CA · Member since 2020 · 18 posts · 4 votes
    5y

    @Jordan Moorhead Thanks for your reply! I've actually seen quite a few of your replies on other Austin threads, so I'm really excited you replied to mine :) This might be kind of a silly question, but how would I go about finding rehab projects in Austin when it seems like many new homes are being built due to the growth of the city?

    0Reply
  • Kamil Kisielewicz
    OP
    New to Real Estate · San Jose, CA · Member since 2020 · 18 posts · 4 votes
    5y

    @Emmanuel Ruggiero I appreciate your advice, and it's definitely a reality that I'll probably need to get creative with financing my first investment due to my age. Hopefully that's a good problem to have? I don't have any family in Dallas anymore, but living with family for a few years in the Bay is one of my backup options. 

    Feel free out to me on BP if you want to discuss the AI/ML project more ;) I might not have the bandwidth myself, but I have friends who might be interested.

    0Reply
  • Kamil Kisielewicz
    OP
    New to Real Estate · San Jose, CA · Member since 2020 · 18 posts · 4 votes
    5y

    @Daniela Andreevska Wow, you've really sold me on Raleigh! I'll do more research on my own and reach out to you on BP if I have more questions. Thank you again for being so helpful :)

    0Reply
  • Kamil Kisielewicz
    OP
    New to Real Estate · San Jose, CA · Member since 2020 · 18 posts · 4 votes
    5y

    @Cindy Bacigalupo I love LA and Orange County!!! Exploring some of the options would be great but I probably won't be able to buy for a while. I'll reach out to you on BP.

    0Reply
  • Antonio CuccinielloPro Member
    Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    5y

    @Kamil Kisielewicz As a software engineer and real estate investor who just moved from NYC to Austin. I am going to recommend neither of the places to start. 

    As an engineer you probably love numbers and data. So instead of just guessing a city is good for you, find data points that would support that X city is the best city for you to invest in based on numbers.

    How do you go about doing that? Looking up the crime rates, the school scores, the price to rent ratios. Then selecting the city with the best data to back it up.

    732-402-6988
    1Reply
  • Andrew Powers
    Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y
    Originally posted by @Kamil Kisielewicz:

    @Andrew Powers Detroit REALLY intrigued me after I listened to the podcast episode where a lady was discussing their low prices. How did you end up in Detroit? Are you also a Software Engineer?

    I'm an auto engineer yes. Came out here for the job. Engineering salary here is very high relative to house prices. When I started out, I would have made the same income here vs where I'm from (MA), but house prices in and around Boston are 2-4x many Metro Detroit towns. 

    High wages relative to housing prices and rent rates makes SE Michigan a good place to look for REI in my opinion. There's more to consider of course than just that, and it depends on your goals.

    Let me know if you want to talk further!

    2Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Kamil Kisielewicz I find all of mine on the MLS, there are plenty of homes built in the 80's and 90's that need work!

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    I have been in the tech field for 20 years and had rental property almost as long. I travel and visit customers all over the country. They are all big tech companies with software engineers. I have made many trips to every market mentioned in this thread accept Hawaii - only one trip there so far. 

    The cost of houses is really not the most important factor here. You can house hack anywhere. More expensive houses often get higher rent and appreciate more over time. The question is where can you maximize income and job hop to higher pay levels quickly? There is no doubt that the most jobs and highest earning potential are in Silicon Valley. The question then becomes more about quality of life, cost of housing and rent return. No doubt housing is very expensive in Silicon Valley, as are taxes and cost of living. You have to figure out how much that offsets your higher earnings. Of course Silicon Valley has proven a strong market over time for appreciation, so even though you spend more, it could increase in value more.

    Of course there are other factors and my personal favorite of all mentioned is Austin. Look at where major tech companies are moving and it is Austin. The company that started Silicon Valley, HPE, is leaving Silicon Valley for Austin. Elon Musk just announced he is moving to Austin. Facebook, Google, Amazon, Apple, Samsung and Dell are all companies with branch locations in Austin. Most of them moved there to expand their talent pool in a less expensive market. Austin has a great vibe and night scene which is attractive to younger people. Texas has no state taxes. As far as political climate, Austin itself is more liberal but Texas as a state is more conservative making for a good mix. Of course keep in mind that housing costs in Austin has also skyrocketed over time, but one difference in Austin is more buildable land. CA has geographic and government blockages that make housing development difficult. 

    Keep in perspective here that many of these people suggesting where to move are suggesting their own city. That is great that people love their city, but when it comes to technology many of these cities just don't have the same opportunities. Some cities mentioned have low house prices, but mainly because of population decline and bad weather. Seattle has great employment opportunities, but is also very expensive and the weather isn't ideal. Amazon is expanding elsewhere for a reason. 

    My suggestion is put in applications in more than one city and see what happens.

    3Reply
  • Eric Hart
    Rental Property Investor · Indianapolis, IN · Member since 2019 · 27 posts · 13 votes
    5y

    @Kamil Kisielewicz

    Can’t complain about life in Indy. Things are still growing here despite covid. Lots of demand for bars, restaurants, sports, and overall entertainment. Lots of neighborhoods that you need to get familiar with. If you decide to move forward with Indy, feel free and shoot me some questions and we can connect.

    0Reply
  • Curt WortmanPro Member
    Rental Property Investor · Raleigh, NC · Member since 2020 · 10 posts · 8 votes
    5y

    Coding on a sunny beach in Mexico was my dream back in 2000. There was great invention of WiFi back then allowing me to have my laptop not chained to a router with a long 50’ cable. I envision someday portability of the work location...

    Tonight I hosted a Zoom call from my car at my daughters soccer practice with my iPhone setup as a WiFi hot spot. VPN access was working seamless to tunnel through the corporate firewall.

    The paradigm shift is happening and corporate will be difficult to pull talented individuals back into the 6x6 cubes...

    Make your personal legend in a location that inspires your creativity and drives you to work passionately at maximum productivity.

    Where is your sunny beach?

    1Reply
  • Cullum Stirling
    Real Estate Agent · Nashville, TN · Member since 2017 · 79 posts · 49 votes
    5y
    Hi Kamil, I live in Nashville (have for ~5 1/2 years) I'm a Mechanical Engineer and just sold my first investment property about a month ago.
    I house hacked it + did all the rennovations myself over the 3 year period when time away from my job allowed. It worked out really well for me and I would recommend it to any young 1st time home buyer.
    I wish I had done it sooner!

    Reach out to me if you have any questions.

    I actually decided to switch from Engineering to Real Estate earlier in the year, so if you need help finding and purchasing the right investment property for you, I can now help you with that too!

    -Cullum

    0Reply
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