Fourplex or rent rooms?

2 Replies

Hi everyone, Not sure if this makes more sense to Californians & other expensive real estate markets vs more affordable ones but roommates are very, very common here in SoCal . Given that fourplexes are few and far between, and rooms rent for what units would in California (I’m in Orange County, 30 miles from LA... probably applies to many other metro areas as well) would it make just as much sense to get an FHA loan for my first property in California as a SFH with 4 bedrooms? I’d house hack, living in the home for at least the required 1 year and I’d do so with a much smaller down payment, lower ongoing overhead, and collecting the same if not more in rent. Roommates sign leases here with the homeowner and have similar protections as a landlord. Tenants have similar protections as fourplex renters would, as far as I understand it. What would you do in an expensive SoCal market ripe with renters?? Get the SFH and rent rooms or wait and wait to find a fourplex with a much higher down payment and mortgage payments?

Marcus Ardrey I don’t recommend buy and holds here in California right now, but if you are willing to live with three other roommates then you have a plan. I would really watch the market for the next two years and sell if it looks like a bubble. If you can afford it you might just want to buy a fixer and do the same thing with the house hack, but have some built in equity to boot.
Good investing.

I currently househack a my SFR in Ventura county. It has 4br but I onyl rent out two while living in the master. All in all, I'm paying less than what I was paying for my previous rent/utilities. So in my situation, it makes sense.

I also at the time don't want a 4th roommate as the place feels like just the right amount of space for 3 adults and it's comfortable for the current rommates. 

I used my VA loan so I plan on looking at potentially selling this place for a better one once my one year primary requirement is over.

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