Hey fellow BP members! Brand new investor here just getting into the game.
When analyzing a house hack situation for rental income, such as a Duplex or Triplex, would I factor in the rent that I would be paying as rental income for my unit? Or would I only include the rent from the unit(s) that I am renting out into that calculation? I am trying to get a better understanding of how to calculate the rental income for house hack situations using the BP Rental Income Calculator.
Thanks so much for your replies in advance. I look forward to meeting and connecting with some of you. I am based in Los Angeles County - San Pedro (South Bay).
Tyson, I would calculate it as if you were renting all the units. If you stay in one of the units, I would then just see it as someone else helping you pay your mortgage while your property will appreciate over time.
I would estimate it for the rent you expect to get once you move out and rent out your side.
@Charles Cooper Hey Charles thanks so much for the response. Thats what I thought. During one of the webinars, I thought I recalled hearing something about using the money you would now be saving as your portion of the rental income since you’re no longer renting elsewhere and you’re now spending that portion on your current rent for the house hack. But your answer makes more sense. Thanks again!
@Cody Neumann Hey Cody, thank you for that answer, that makes sense. I’ll use that method moving forward.
Originally posted by @Tyson Thurman :
using the money you would now be saving as your portion of the rental income since you’re no longer renting elsewhere
the money you'd be saving compared to what you're currently paying in rent would be used in your ROI calculation.
As both have already mentioned, use the expected rent on all units for the house hack calculation - that way you can ensure you cash flow when you decide to move out and rent your old unit.
@Dan Portka That makes total sense. Thanks for taking the time to reply!