Top of Budget Duplex

3 Replies

I’m a first time home buyer & want to house hack by purchasing a duplex. I found an excellent property in an extremely desirable location. I’m concerned because the margins are slim and it’s at the very top of my budget. The positives are that this property will bring high-quality tenants and high volume of applicants when listed for rent. My question is: is this a good move? I’ll be moved out in about a year and this probably should cash flow at least $500 /month while fully occupied.

 

 @Jordan Babich Hi Jordan! 

In my area of San Diego, CA it's pretty hard to find a good return on investment to house hack when buying a duplex, (this is assuming you need a move in ready property using an FHA). If you can, try running some numbers on a triplex or quadruplex and those will typically yield better cashflow.

That being said, 500 dollars cashflow doesn't seem bad as long as you have all your expenses and fees accounted for. Like Nicholas said, showing your numbers will help us better assess the property for you. Also sometimes its beneficial to look a year or two away from initial purchase and look at the potential appreciation/raised rents from improvements, that can change how good a deal is drastically. 

Whether it's a good move or not depends on your standards as an investor though. Does this property meet your specific standards? 

@Jordan Babich

Hi Jordan,

In the San Diego market, having something that cash flows while house hacking is a bit difficult to find, but not impossible. With the property cash flowing about $500 a month when occupied is a great starter especially if all you costs are taking care of and you have reserves (cap ex, maintenance, etc.) factored in. 

Like Emery said whether it’s a good move depends on your goals, risk tolerance etc. In my opinion, if you have a house hack cash flowing at that amount I would definitely go for it.