House hacking in NYC or NY/CT/NJ suburbs

8 Replies

My partner and I are working professionals in NYC/Manhattan and are in interested in house hacking (as far as any suburbs 1-1.5 hrs outside of the city). Our plan is to purchase a multi-family home early next year (with a preliminary budget of $800K or less), live in one-unit and rent out the other(s). We realize the prices here in the area are rather high, so we do not expect our rental income to completely offset our mortgage. But we figured as long as we're paying the equivalent of (or ideally less than) our current rent in Brooklyn, it is better to purchase a home, build equity, and begin our journey as real estate investors! We've started looking at a few places and ran the numbers to see if this was feasible. We've found a couple of homes that could be potentially work — we think it would be difficult but could possibly find something worthwhile with a bit of searching/effort. We wanted to see if anyone had any experiences or stories of others who have successfully house hacked in the NYC area. What are some nice cities that we should look into within our current budget? Conversely, do you think it's just too expensive and not worth house hacking at all near an expensive — should we just continue renting and look out-of-state for REI opportunities?

This is absolutely doable. 1.5 hour radius is a pretty big area and you should be able to find plenty of deals that can work. Biggest mistake I see is investors being initially drawn to areas where the numbers are more attractive. It's a house hack so you're going to have to want to live and commute from there. I'd first find towns/cities that you can see yourselves living in and then work backwards from there.

@Jen Lee  I would focus on Northern NJ, maybe even Hudson County with your budget if you still want more of a city feel, or up toward Westchester, but I think your multi-options vs. livability quotient would be better served going into NJ. It's very competitive, but with an 800k budget you have a lot of options and could even get a 3 or 4 family depending on where you were comfortable commuting from (Bergen and Essex Co have easy commutes) and live in one unit and cash out on 2 or 3. It depends how much room you will need for you own place. Happy to discuss it more, but we have plenty of people who get out here and do exactly that for less. With a high budget in place, you have way more options.

I've done it in New Rochelle. Not living for free, but significantly cut my rent and I have an asset to boot.  Certainly the further from NYC you go, the easier it will be to find a break-even property.

Did this in New Rochelle for a couple of years. Have moved since, but strongly encourage you take a look there. Billions of $ of investment and development happening in the downtown core. Commuting is perfect - Metro-North into Grand Central, Amtrak up or down to Boston/DC, 25 mins to LGA, quick drive and you are on your way upstate. On the Long Island sound with beaches!

I bought a 4-plex, lived in the 1 bedroom and rented out the 3 other 3-bedroom units. FHA loan with 3.5% down and I was cash flow positive when I moved in. ONLY downside - there are rarely 4-units on the market. Once you get one, you hold onto it. I'm definitely never giving mine up!

You could do Mt. Vernon or Yonkers but New Ro has a much higher quality of life and a lot more upside in my opinion. Good luck!

@Jen Lee I'll echo @Jonathan Greene 's comments about Hudson County if you want a city feel.  I bought a multi-family in Hudson about six months ago.  I can see Manhattan from my front steps and can be in the Port Authority in less than 30 minutes.  You can definitely find a property for less than your budgeted $800k around here.  

Previously, I came really close to purchasing an out of state property because they are so much cheaper. But instead, I took the same amount of money for a down payment that I was going to use out of state (which required 25% down for an investment loan) and used it to by my place here in northern NJ for 5% down instead. So I now have a property worth 5 times as much as the out of state property and I make more in both loan pay down and cash flow each month.

Feel free to send me a PM if you want to discuss further.  Happy to tell you more, about my agent, etc. 

We are currently in the process of closing a 3 family in Union City for less than your budget so it is definitely doable (crossing my fingers that everything works out with our closing!). It is our first purchase and we will be house hacking as well. It did take us a long time, many property visits, and failed offers to finally get here so I won't say it is easy. Although, like I said, this is our first time too so maybe it is easier for more experienced investors. ;) Would love to stay in touch with you and other folks here as we start our house hacking journeys! 

Hey @Jen Lee it is definitely doable up here in Westchester. Generally won't be cash flow positive due to the taxes, but in my opinion, still a smart financial move for all the reasons you mentioned. And can be a beautiful place to live, with a great commute (depending where you choose). 

Investing out of state/elsewhere is the other option if you really enjoy where you live. Definitely a personal decision on how much you want to change and/or sacrifice lifestyle wise.  

Feel free to reach out if you have any questions, I'm in/ from Tarrytown, which is being flooded with Brooklynites.

i got two properties here in hudson and buying another 2 fam in Bloomfield. all house hacked, never paid rent just profit. i still live in my 1 bedroom that i rent out the room for more than the mortgage in union city. other place i do have some shootings every week or so, but area is cleaning up in jersey city. 800k is a lot, id buy 2 multifamilies for that, but as someone said, if u care how the neighborhood is and cant wait out appreciation, than yes, go for nicer areas