House hacking: New York City neighbourhoods
Rental Property Investor · NJ · Member since 2020 · 57 posts · 53 votes
House hacking: New York City neighbourhoods
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Attorney · Bedford, NY · Member since 2020 · 15 posts · 24 votes
6yIn 2017 I purchased my first rental property in the Bronx--specifically Morris Park. The home sits on a 2500 SF lot, and it is a 3 bedroom duplex over a 2 bedroom loft. Both units were gut renovated in 2017 and have in unit washer dryers. At the time I paid $630k for the home (post renovation), today it is worth about $850. The increase in value has been driven by hype around a new train station going at the end of the street. What I learned from this deal was 1) buy in a good area, not an area that is gentrifying. You want to be in a nice neighborhood to start. 2) buy a property that is in good condition. Mine was a gut renovation and I purchased it from the contractor. This has allowed me to attract amazing tenants and pay less in repairs and maintenance. It was also an easy starter investment. There is a steep enough learning curve with managing a "business" (taxes, lawyers, implementing systems that will allow you to scale quickly, even a 2 fam has a steep learning curve). 3) House hacking is great, I lived for free for a year. 4) Parking in NYC is EXTREMELY valuable. My house has a garage and driveway. I charge the tenants for parking and I rent the garage out for a significant amount of additional income. 5) because I lived in the home my mortgage rate is 3.375% on a 30 year fixed with 20% down, and I no longer live there. I have since gone on to purchase additional properties and investments. But, I wish I could house hack every purchase hahah . . . I could go on for days. House hacking in NYC is very possible and, if you watch your numbers, very profitable. I now return 8% a year on that property and have built significant equity that I am allowed to draw upon for $$$--or, maybe I will sell for the right number. You can do it and you should do it. good luck!
20 Replies
- 6yAbel CurielBusiness MemberReal Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
Originally posted by @Lloyd Preece:
Hi, has anyone had any good house hacks in New York City of the nearby areas in NJ? Best deals I can seem to find are 3 bedrooms in Astoria, prospect park surrounding area, Harlem and jersey city. Anyone have any good experiences in this market?
Good morning Lloyd,
There are plenty of parts of NYC where folks have had success in house-hacking. Which areas would work for you will depend on your goals (long-term and short-term) and financial situation.
Astoria and Prospect Park are in the among the higher price-points in NYC so I don't see many house-hackers targeting those areas unless they are using 20-30%+ down payments. Other areas that appeal to house-hackers are in the South parts of Queens and Brooklyn.
That being said, these forums are a great place to get your questions answered. The more info the BP community has, the better they can assist you. Tell us a little more about what you're looking to do and we can point you in the right direction.
Best of luck to you moving forward!
Abel
REbuild Team - eXp Realty5234 Reviews - Attorney · New York, NY · Member since 2019 · 72 posts · 27 votes6y
Agree with @Abel Curiel, New York City is a tricky spot for "house hacking", but queens, brooklyn, and even some parts of Long Island would be good places to start
- Member since 2019 · 25 posts · 19 votes6y
I’m doing one on the border of Ditmas Park / Flatbush. Happy to share the numbers if you’d like. It doesn’t cash flow, but the rental income offsets the the mortgage payments enough to equal what we used to be paying our landlord in rent.
- Developer · Brooklyn, NY · Member since 2019 · 2 posts · 0 votes6y
@Krista Kennedy I would love to hear more. Is it a condo or house? How did you find the deal and what are the numbers like now?
- Harlem, NY · Member since 2015 · 27 posts · 10 votes6y
Hi @Abel Curiel & @Adam Leitman Bailey,
I was actually looking to do the same as well in NYC. I'm currently renting in Harlem but was looking at possibly house hacking in the Bronx. Looking at Mott Haven/Melrose neighborhood. Cash flow would be nice but not necessary. Will probably look to use 203k or home-style as I'm currently learning about that process.
@Krista Kennedy that's awesome. Congrats!
- 6yAbel CurielBusiness MemberReal Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
Originally posted by @Akwasi Degraft:
Hi @Abel Curiel & @Adam Leitman Bailey,
I was actually looking to do the same as well in NYC. I'm currently renting in Harlem but was looking at possibly house hacking in the Bronx. Looking at Mott Haven/Melrose neighborhood. Cash flow would be nice but not necessary. Will probably look to use 203k or home-style as I'm currently learning about that process.
@Krista Kennedy that's awesome. Congrats!
Good morning!
House hacking is a solid strategy. While cash flowing on your first deal would be very difficult, it isn't impossible depending on your down payment, qualifications, and property type.
Many new investors in NYC + Long Island are making it work by house-hacking. Cash buyers and other experienced investors are jumping on off-market, undervalued deals, but these deals are tough to come by and even tougher to CLOSE for newer investors.
Here are the reasons why folks use the house-hack strategy when building/growing their NYC portfolio:
- They can get in with a low down payment - You can get into a multifamily property property in Queens, Brooklyn, the Bronx, and Long Island with less than $35K!
- They can significantly lower their current living expenses - People currently paying ~$2K/month in rent can pay as little as half of that for their portion of the mortgage (after collecting rental income).
- They gain acquisition, project management AND property management experience - all which will help tremendously when its time to scale and grow the portfolio.
-When they move out (to the next house hack OR forever home), the income of their currently occupied unit will oftentimes allow them to cash flow.
- NYC properties appreciate higher than most parts of the country - of course, this should not be relied upon. Rather, it should be looked at as a bonus!
Best of luck to you on your journey!
Abel
REbuild Team - eXp Realty5234 Reviews - Property Manager · Bronx, NY · Member since 2017 · 20 posts · 9 votes6y
Hey everyone- @Abel Curiel love all your intel on BP!
Just wanted to chime in for some reassurance that you CAN house hack in NYC. I/We own 4 properties, where we have lived in while renting rooms and moved on to the next. Now we are managing them all and managing an additional one for a friend, and even have more friends getting into to it in the next few months/years. FYI- all in the BX!
*And we cashflow :) - Harlem, NY · Member since 2015 · 27 posts · 10 votes6y
@Abel Curiel yes, I wholeheartedly agree! Thank you for your input. I think the toughest thing for me is actually locating those undervalued deals. I plan on taking a drive through Newark this weekend to see if there's properties worth looking into.
- Harlem, NY · Member since 2015 · 27 posts · 10 votes6y
@Pedro Sena that's awesome Pedro. What's your opinion on finding undervalued properties in the Melrose area of the Bronx?
- Property Manager · Bronx, NY · Member since 2017 · 20 posts · 9 votes6y
I'm working on putting an offer in for a short sale property now but EVERYTHING in the BX is getting so expensive nowadays. Recently saw a SFH for 529k when 3 years ago same house was listed at 450. You can dig and find as long as you're ready to get your hands dirty and handle the cosmetic fixes yourself. I'm not at all picky so i guess that helps when looking for homes.
- Attorney · Bedford, NY · Member since 2020 · 15 posts · 24 votes6y
In 2017 I purchased my first rental property in the Bronx--specifically Morris Park. The home sits on a 2500 SF lot, and it is a 3 bedroom duplex over a 2 bedroom loft. Both units were gut renovated in 2017 and have in unit washer dryers. At the time I paid $630k for the home (post renovation), today it is worth about $850. The increase in value has been driven by hype around a new train station going at the end of the street. What I learned from this deal was 1) buy in a good area, not an area that is gentrifying. You want to be in a nice neighborhood to start. 2) buy a property that is in good condition. Mine was a gut renovation and I purchased it from the contractor. This has allowed me to attract amazing tenants and pay less in repairs and maintenance. It was also an easy starter investment. There is a steep enough learning curve with managing a "business" (taxes, lawyers, implementing systems that will allow you to scale quickly, even a 2 fam has a steep learning curve). 3) House hacking is great, I lived for free for a year. 4) Parking in NYC is EXTREMELY valuable. My house has a garage and driveway. I charge the tenants for parking and I rent the garage out for a significant amount of additional income. 5) because I lived in the home my mortgage rate is 3.375% on a 30 year fixed with 20% down, and I no longer live there. I have since gone on to purchase additional properties and investments. But, I wish I could house hack every purchase hahah . . . I could go on for days. House hacking in NYC is very possible and, if you watch your numbers, very profitable. I now return 8% a year on that property and have built significant equity that I am allowed to draw upon for $$$--or, maybe I will sell for the right number. You can do it and you should do it. good luck!
- Attorney · Bedford, NY · Member since 2020 · 15 posts · 24 votes6y
Originally posted by @Akwasi Degraft:
@Pedro Sena that's awesome Pedro. What's your opinion on finding undervalued properties in the Melrose area of the Bronx?
You won't find anything "under valued". You will find fair deals if you really dig. People generally know the value of their homes. I would also avoid Melrose. There is too much hype and prices don't make sense. I also strongly feel that the hype over gentrification is way overblown. I live in the Bronx, I know the Bronx, I work here, I am involved in politics here, and the South Bronx is going to continue to struggle as long as the politicians continue to intentionally oppress the South Bronx. Try to focus on neighborhoods that are already safe and considered good neighborhoods.
- Harlem, NY · Member since 2015 · 27 posts · 10 votes6y
@Account Closed you raise good points thank you. Let me continue research and find good deals.
- Member since 2019 · 25 posts · 19 votes6y
@PhilMinzer, @akwasiDegraft, here are the numbers as requested:
Single family 6 bed / 2.5 bath house, 10 mins from the B/Q line
$1.43M purchase price in 2017
$240k cash to close with VA loan at 3.5%
$160k reno - add 1.5 baths / master suite on top floor, upgrade electrical service, replace water heater, misc repairs
Monthly cash flow:
$6500 mortgage
$ 500 utilities
$7000 total expenses
$4000 rent income from 4 bedrooms
So we currently pay about $3k/mo which is roughly equal to our previous monthly rent. We also have a guestroom and tons of space. And we adore our housemates! This is very different from apartment living.
I am in the process of refinancing to bring the monthly payment down to $5900 (3% interest). If we were to rent out the guest room and driveway we would be getting close to breaking even. We are also close to being able to do a cash out refi to pull out the initial $400k invested due to appreciation and more lenient loan parameters for a VA refi.
- Rental Property Investor · NJ · Member since 2020 · 57 posts · 53 votes6y
@Douglas Strauss
This is interesting! Where in the Bronx do you typically see fair deals these days? For context I moved here last year from the UK and have been renting in Manhattan, saved up well and want to start putting cash to work via either a house hack or just generally sound investment. Haven’t been to the Bronx before so looking for a starting point to begin research!
- Real Estate Agent · Jacksonville, FL · Member since 2019 · 76 posts · 43 votes6y
Originally posted by @Akwasi Degraft:
@Abel Curiel yes, I wholeheartedly agree! Thank you for your input. I think the toughest thing for me is actually locating those undervalued deals. I plan on taking a drive through Newark this weekend to see if there's properties worth looking into.
Which areas in Newark are you looking at? I grew up down the road a bit in Montclair. My partner and I are also looking into Newark. I'd be happy to compare notes.
- Real Estate Agent · Jacksonville, FL · Member since 2019 · 76 posts · 43 votes6y
Originally posted by @Krista Kennedy:
@PhilMinzer, @akwasiDegraft, here are the numbers as requested:
Single family 6 bed / 2.5 bath house, 10 mins from the B/Q line
$1.43M purchase price in 2017
$240k cash to close with VA loan at 3.5%
$160k reno - add 1.5 baths / master suite on top floor, upgrade electrical service, replace water heater, misc repairs
Monthly cash flow:
$6500 mortgage
$ 500 utilities
$7000 total expenses
$4000 rent income from 4 bedrooms
So we currently pay about $3k/mo which is roughly equal to our previous monthly rent. We also have a guestroom and tons of space. And we adore our housemates! This is very different from apartment living.
I am in the process of refinancing to bring the monthly payment down to $5900 (3% interest). If we were to rent out the guest room and driveway we would be getting close to breaking even. We are also close to being able to do a cash out refi to pull out the initial $400k invested due to appreciation and more lenient loan parameters for a VA refi.
Krista, this is AMAZING! Thanks for the share and enjoy!
- Harlem, NY · Member since 2015 · 27 posts · 10 votes6y
@Ralph Chiaia I had plans of looking in the North Ironbound area. But after meeting with Abel, I decided to invest in a property in Brooklyn, NY. Going forward I may look to Newark or possibly Trenton.
- Attorney · Weehawken, NJ · Member since 2021 · 56 posts · 35 votes5y
Originally posted by @Akwasi Degraft:
@Ralph Chiaia I had plans of looking in the North Ironbound area. But after meeting with Abel, I decided to invest in a property in Brooklyn, NY. Going forward I may look to Newark or possibly Trenton.
I see this thread is over a year old, but I was wondering how your search ended up? Were you able to find a spot in Brooklyn to house-hack?
- New to Real Estate · Member since 2023 · 1 post · 0 votes3y
Quote from @Krista Kennedy:
@PhilMinzer, @akwasiDegraft, here are the numbers as requested:
Single family 6 bed / 2.5 bath house, 10 mins from the B/Q line
$1.43M purchase price in 2017
$240k cash to close with VA loan at 3.5%
$160k reno - add 1.5 baths / master suite on top floor, upgrade electrical service, replace water heater, misc repairs
Monthly cash flow:
$6500 mortgage
$ 500 utilities
$7000 total expenses
$4000 rent income from 4 bedrooms
So we currently pay about $3k/mo which is roughly equal to our previous monthly rent. We also have a guestroom and tons of space. And we adore our housemates! This is very different from apartment living.
I am in the process of refinancing to bring the monthly payment down to $5900 (3% interest). If we were to rent out the guest room and driveway we would be getting close to breaking even. We are also close to being able to do a cash out refi to pull out the initial $400k invested due to appreciation and more lenient loan parameters for a VA refi.
Thank you so much for the share Krista :)
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