*This link comes directly from our calculators, based on information input by the member who posted.
I am purchasing this as my primary home and I was going to rent out a room or two. I am trying to reduce my rent as I have sole custody of two kids and I'm going through a messy divorce. The negative numbers on this report make me think that I am doing a bad job? This is my first time doing this calculations and analyzing my home as an investment deal. I'll renovate when my divorce is final and I get the rest of the money.
Property Manager · Michigan Ctr, MI · Member since 2016 · 661 posts · 581 votes
11mo
Hey Denise,
I went through your report, and you’re actually looking at this the right way—you’re just interpreting the numbers like an investor, when what you really have here is a hybrid situation: part home, part house hack.
Your report shows a purchase price of about $410,000, with $75,000 budgeted for renovations. That brings your total project cost to roughly $496,000. Your projected mortgage payment before refinancing is around $2,200/month, and about $1,887/month
after the refinance. With rent from one or two rooms totaling about $2,275/month, the calculator shows a negative cash flow of around $885/month before refi and $568/month after.
Here’s the thing — those numbers look bad only if you treat this like a pure investment property. But you’re not. You’re buying a primary residence that also helps offset your housing costs. If you were renting a comparable home for, say, $3,000–$3,200 a month, you’re effectively dropping that down to under $600 out-of-pocket once your room rentals are factored in. That’s a major improvement to your monthly budget.
Also, don’t forget that the report’s “Return on Investment” section isn’t really meant for owner-occupants. You’re building equity through appreciation and paying down principal, not chasing immediate cash flow. Once you renovate and your divorce is finalized, your property could be worth closer to the $500,000–$550,000 range that the report projects. That’s tens of thousands in potential equity that won’t show up in your monthly cash flow line but is still real value you’re creating.
If I were you, I’d focus less on the red numbers in this first phase and more on affordability, flexibility, and long-term upside. You’re making a smart move: reducing your living expenses while positioning yourself to build wealth once the dust settles. When the reno’s done, we can rerun this as a true “house hack” scenario—those numbers will look a lot more like what you’re actually achieving financially; Denise I hope this helps you a bit, I sent you a DM on BP... it's one of the reasons I do this, I hope you can assist. Thank you.
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
11mo
Agreed with Ricardo. What you're looking for as a house hacker is for the property to reduce your housing expenses, which it appears it would. When you move out, you're wanting the property to cash flow.
that said, make sure the rent assumptions are realistic. I'd connect with local investors to see if the rent numbers are feasible
Brick House CPAs53 Reviews