FHA House Hacking with A Roommate?

6 Replies

Hello,

I'm about to close on my first rental property in a couple weeks in Milwaukee, WI, using an FHA loan. It's a duplex; 2 Bed 1 Bath in each unit. The Bottom unit is currently occupied (renting at $700), and I will be living in the Top unit (at least for the first year). My mortgage payment will be $900 a month (this includes principle/interest, taxes, home insurance). I'm going to be using the rent I collect from the bottom unit to pay the majority of the mortgage, leaving about $200 left for me to pay out of pocket...

However, I was curious about renting out the second bedroom in my unit for about $400/month so that I won't have to come out of pocket for ANY of the mortgage...

The issue is, on one hand, I've never had a roommate and I like my own space, BUT, on the other hand, the mortgage would be completely paid for, and I'd be living completely rent-free, and I'm only planning on living there for the first year.

Has anyone experienced this dilemma, or has any helpful advice on this and how to find good roommates?

If it's worth mentioning, I'm planning on using the BRRRR method of real estate investing.

@Jalen Leichman

Renting out an extra room is definitely a good strategy to maximize the benefits of house packing. I would make sure you do a very thorough screening of your potential tenant to make sure things move smoothly. 

Another approach to take this would be to live in the second unit and then when your one year is up, you can rent the whole upstairs unit and your property should be getting good cash flow.

This is exactly what I did on my first deal.  I rented out the upper unit and lived with two roommates in the lower unit.  It actually ended up cash flowing like $100/month AND I lived for free.  It is a great way to get started.  You can find roommates through FB Marketplace (that's what I did).  You'll just have to weed through a lot of people to find someone you actually want to live with.

Thanks @Brock Mogensen

Glad to know your experience with the same situation turned out well, that gives me a little bit more peace of mind knowing that it can/has been done successfully. I hadn't considered looking for roommates on FB Marketplace, but I will definitely give'em a shot. 

Having a roommate in the 2nd bedroom is a great idea! But of course you want to find the right one.  The best way to find one is word of mouth.  See if your friends know anyone that is looking for a place. Maybe it's just me but I'd rather have someone who has a personal connection as a roommate that some random person.  However if you need to go the random person route, FB marketplace like Brock said is a good place to start.  Finding a roommate is something you should handle like a job interview to make sure you get a right fit.