My research on House Hacking in NJ
*Disclaimer - I'm a total beginner, so don't take anything too seriously. If you see any problem with something I said, please let me know
Hi everyone,
Been researching a lot, and lot of people in hot markets ended up employing a "rent by the room" strategy in order to House Hack. I know @Scott Trench has definitely talked about this before in some of his podcast appearances. This BP article by his friend Craig also illustrates what I'm talking about.
I think the same thing might be possible here in NJ. Use an FHA or an FHA 203b to finance a 2-3 sfh and put a renter in unused rooms.
At first I was thinking to try this in Jersey City (which would be a dream). However the big problem is that the market in JC is much more suited towards Condos which have those HOA fees. From what I've read, these fees can increase with short notice. Even if you do try to do this on a condo there, you will have to vet the HOA extensively and make sure that renting out your other rooms will be okay by them. Furthermore, usually the affordable condos are usually 1 bed 1 bath though, there could be an opportunity if you do what Craig did and live in the living room while renting out the bedroom.
So with JC out of the picture, I'm looking more into some areas a little more outside. There's been talk of Essex County having potential and that's where I'm starting to look now, the downside to this area is that there seems to be much more crime (i.e. Newark, East Orange). I don't exactly want to occupy a dangerous area for the minimum year it takes for the FHA. I would also recommend looking into Bergen County, as I recall Garfield NJ having some potential for this as well. Garfield is good because it's relatively safe and close to NYC, but the prices are still pretty inflated even for the fixer-upper kind of houses.
On more thing to be careful of with this kind of thing is the legality. I tried my hand at reading legal docs online for Jersey City, and it can be pretty easy to go wrong with this stuff! For anyone interested, you should def try to read as many legal docs as you can for your area of interest. This is a pdf of Tenant's Rights in Jersey City that I found. Papers like these give insight into what you should watch out for since NJ is supposedly a fairly tenant friendly state.
If anyone has anything to add or wants to talk about this stuff, feel free to reply or message me! I love discussing this stuff! But I'm still a beginner and don't know what I'm doing yet.