Im new to bigger pockets and real estate in general. Anyway, I'm 21 and trying to figure out how I can have more financial freedom. I live near park city, in a small town called coalville. I've been attending the university of Utah, and I commute 3 times a week. My goal is to live in salt lake but I feel as if rent is pointless and I'm throwing money out the window. I recently found out about house hacking, and was wondering whether it'd be smarter to buy a single family house and rent out the rooms or buy a multi family house. Open for any advice!!
Hi Josh, I haven't house hacked myself yet but it all depends on what suits you and what's available in your area.
For a single family home, you get a larger space than you would a multifamily home and these are easier to find in all parts of town compared to multifamily homes. The downside is that house hacking a SFH means roommates in the shared spaces. You would have to do a good amount of screening. MFH tend to be smaller and harder to find but everyone gets their own space and once you leave, you have multiple spaces you can rent out. Good luck!
I just got my first property ~3 months ago, and had a very similar approach/interest to yours. Yader makes a good point regarding the roommates. Personally I'm not too hot on sharing a SFH with potential strangers. I found a property w/ 2 small homes on it. I currently live in the back unit and rent out the front (higher rental value). I am considering cleaning up my back unit to a hospitality level, and post as AirBNB for weekends when I am away for additional $$.
Just something to consider, I feel this option has given me much more privacy (and options) than a single house would.
Househacking is the best! If you don't own any property right now, you should qualify for an FHA loan, which only requires 3.5% of the purchase price down. The best part is, duplexes, triplexes and even 4-plexes qualify.
Last year I bought a 4-plex in Utah county, and my 3 tenants pay the bulk of the rent. I'm living more cheaply as a live-in landlord than I would be renting, and my tenants are handing me equity every month. Great walls make great tenants, and that way you'll attract more long term tenants as opposed to a college buddy who's willing to split a room with you for a semester.
I'd imagine you might get a slightly higher cap rate with the shared rooms, but for me it's worth it to do the small multi-family. I'm also inexperienced, but I hope that helps!
@Josh B. yes you should house hack in SLC. I live in Pinebrook/Park City. My first home was bought in Sugarhouse and it was a house hack. You need to get the 3.5% down and also have a w2 that will support the payment. The bank will not care about the money you make from renting out the other rooms.
If you have more questions shoot me a message. I am also a realtor here and can help look. Good luck!!!