Hey Guys -
So I'm fairly new to REI and have been working towards getting my first MFH in Brooklyn (Prospect Heights/Crown Heights/ Bed Stuy areas). Wife and I want to occupy one of the 2-3 units of a townhouse/brownstone.
Now as I'm reading more and more, the thought of pulling this off in Brooklyn seems less appealing given the high Price-Rent ratios in NY. Wondering if we should just invest in a rental building in another area altogether.
Curious to hear other folks' opinion on Brooklyn House Hacks. Would also love to grab coffee/beers in NYC if anyone's up for it.
Hi @Maximilian Gabath it's certainly different in NYC vs other markets. The rent won't necessarily pay your entire mortgage though it will certainly help. it depends what it's worth to you. You could live on one floor and rent to tenants a better part of the house or vice versa. I'm doing this now for a client (just listed rental yesterday) where they're taking sole ownership of the yard...they prefer the luxury over the extra income, for now.
In short, doable though different style I suppose.
You can certainly invest in a market outside your backyard. I live in Ca., with tough cash flow challenges, so invest in Texas, where I grew up. I insure good property management and extensive due diligence.
@Maximilian Gabath it all depends on what you're looking for. You can probably get better cash flow elsewhere but far less potential appreciation. But there are opportunities in Brooklyn (but perhaps not in neighborhoods you want to live in, depends on your commute preferences, etc) to do what you've described and have nearly all of your mortgage paid for. Compare that to whatever rent you're playing and the neighborhoods you want to live it and make your decision that way.
I am house hacking in a truer sense, in that I rent out the other bedrooms in the apartment I live in. So I cash flow a little bit and don't pay rent, which is nice (not to mention the crazy appreciation). If you and your wife are willing to do that, it opens up more potential opportunities.
Thanks for the feedback @Adam K. and @Brandon Cohen . I did run several scenarios through my model for brownstones in our desired areas (or slightly outside) and it gets us close to cash flow. Guess I read too much into the "1% rule" that just doesn't seem possible in NY. Like you both said, we'll just have to get a bit creative and be happy with having rent subsidized - if not fully paid for.
Hi @Kathy Stewart - Makes sense, and we might do that if we can't find a good deal in NY.
@Maximilian Gabath Welcome to BP. Sounds like an interesting start. I've been wondering how the Brooklyn area would work for house hacking. Please let us know how it goes.
It's doable in certain parts of BK if you don't mind living in the basement....