ROI and Cashflow for a House Hack in an Expensive Area

ROI and Cashflow for a House Hack in an Expensive Area

Rental Property Investor · Raleigh, NC · Member since 2021 · 5 posts · 0 votes

I live and work in Research Triangle Park and currently rent a room in downtown Raleigh. 

I just recently completed the Guide to House Hacking book and am having a hard time understanding if net worth ROI or cash flow should be a bigger priority. For a move in ready house in this market, there is really no way to positively cashflow more than 100$ and a lot of properties I have assessed would have negative or break-even cashflows. These same properties would return me 10-15% yearly on my initial investment which is why I do not know which is more important and why. This is kind of a vague post but any input or opinions from people in a similar situation would be greatly appreciated!

Some extra information: I am looking at single family homes under 350K and am looking to put a 3% down payment on the property. My analysis is already factoring in a 250$ reserve (~15% gross income).

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  • Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    5y

    @Evan Gorczynski In my opinion, going for cash flow is significantly more important when starting out. That doesn't mean to ignore appreciation, but you need to optimize for one outcome!

  • Rental Property Investor · Raleigh, NC · Member since 2021 · 5 posts · 0 votes
    5y

    @Antonio Cucciniello I have not been factoring inflation into my analysis due to the uncertainty. The ROI is based off of the loan pay down specifically. Does that change anything?

  • Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    5y

    @Evan Gorczynski no you are on the right track there!

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