First House Hack - New Build vs Cosmetic Fixer Upper

2 Replies

Hi Everyone,

I'm currently in the market for my first house hack, a 2-4 unit in a desirable part of the city. I would like to find a deal that I can purchase for slightly below market value that needs moderate cosmetic work. I'll do my own repairs while living there to create initial equity in the property. Later allowing me to pull money out of the first deal to provide my down payment for the second property.

I've recently come across a newly built duplex that's in a decent part of town, rents in that area range from $1,500-1,800 per month. The list price of the property is $395,000 (top end of my budget) however considering it's new I'm assuming I could attract a high quality tenant for top end rent.

I would really appreciate everyones opinion on this topic considering you were in my shoes. Thanks!

I am sure there are far more knowledgeable folks on this site but my two cents is that you usually pay a premium for new build that does not necessarily get reflected in the rent you can reasonably collect.  I would not proceed based on that assumption without verifying rental rates through research.  Location, charm, convenience, pet policies and other soft factors frequently are the drivers for rental rates.    

Thanks Darius, you touched on some really good points. If I decided to pursue it I would defiantly speak with some local property managers to get a more concrete number for that specific area.