Savannah, GA · Member since 2015 · 4 posts · 1 vote
Looking at a house hack duplex, If both units were rented it would cash flow pretty well but with just one unit rented its about $300 a month with all expenses considered. Being that i'm going to live in it for a year then rinse and repeat, i was thinking it may work out. i'm also considering i currently pay $900.00 in rent (sigh) lol. should I not persue this property ??
House hacking is definitely worth it. The very first deal I did was a house hack with a duplex and is still working out fantastic. Be aware of all of the expenses involved and be realistic. $900 per side in rent with a mortgage of $1200 does not equal only $300 a month for a payment.
The expenses to consider are:
Principal (on mortgage)
Interest (on mortgage)
Primary mortgage Insurance (when applicable: typically 1% of mortgage)
Property Tax (1%-3% of assessed value)
Property Insurance (.4%of assessed value)
Maintenance (8% of rent)
Management ( 8%-10% of rent should always include management even if you plan on managing)
Utilities (people tend to forget about this one... Because it is a duplex chances are the water is not metered separately and sewer lines are also tied together. Therefore the owner will typically pay for these. Water, Sewer, and Trash could add up to $150-$200 a month.)
Denver, CO · Member since 2015 · 31 posts · 0 votes
10y
Hey @Alton Guyton, I've never done a house hack before but this is something that I am working towards now. In the research that I have done, in the deal analysis you run the numbers as if all of the units were rented by tenants.
Investor · Houston, TX · Member since 2012 · 354 posts · 186 votes
10y
Not necessarily. Your first estimate done on the duplex if it was rented on both sides is the correct one. House hacking is living as cheap as possible and minimizing your costs in buying a investment property.
If you bought a SFR and was repairing it to flip while living in it, then it would also be house hacking and you wouldn't cash flow. But you then sell the house or rent it out after your year is up and move on to the next deal.
Same with a duplex. You buy with 3.5% down instead of 20-25% down. You basically live rent free while someone else says your mortgage and then when you move, you have a cash flowing property.
Savannah, GA · Member since 2015 · 4 posts · 1 vote
10y
@Simon Shih I understand what your saying. I was thinking that I had to follow the "cash flow at least a dollar" and "don't buy with hopes of things getting better" rules but following what your saying the property will cash flow about $320 per month with both units rented.
@Michaela G. Sounds good to me and being that i'm in a 1br 1bth and the units in the duplex are 2b 1bth id be getting a whole extra room :)
House hacking is definitely worth it. The very first deal I did was a house hack with a duplex and is still working out fantastic. Be aware of all of the expenses involved and be realistic. $900 per side in rent with a mortgage of $1200 does not equal only $300 a month for a payment.
The expenses to consider are:
Principal (on mortgage)
Interest (on mortgage)
Primary mortgage Insurance (when applicable: typically 1% of mortgage)
Property Tax (1%-3% of assessed value)
Property Insurance (.4%of assessed value)
Maintenance (8% of rent)
Management ( 8%-10% of rent should always include management even if you plan on managing)
Utilities (people tend to forget about this one... Because it is a duplex chances are the water is not metered separately and sewer lines are also tied together. Therefore the owner will typically pay for these. Water, Sewer, and Trash could add up to $150-$200 a month.)
Savannah, GA · Member since 2015 · 4 posts · 1 vote
10y
@Simon Shih thank you Simon so ready to get started
@James Ehrig thank you James. I used the bigger pocket's rental calculator but i only added rent from one unit. I'll re-due the simulation with both units and update the numbers.
Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
10y
@Alton Guyton I just bout my first duplex OOC. I currently cash flow a little over $100 a month.
But just like @simon shih said your goal is to live the most inexpensive way while building experience and just setting up your overall plan over the course of the year you'll at LEAST be living there.
And yes your tenant is servicing the debt.
When you move (the exact plan I'm working on now) than you will see the real value of multi-families.
Investor · Vineland, NJ · Member since 2013 · 113 posts · 18 votes
10y
@Alton Guyton I just bout my first duplex OOC. I currently cash flow a little over $100 a month.
But just like @simon shih said your goal is to live the most inexpensive way while building experience and just setting up your overall plan over the course of the year you'll at LEAST be living there.
And yes your tenant is servicing the debt.
When you move (the exact plan I'm working on now) than you will see the real value of multi-families.