I Need Housing, But I Want Income Too

Member since 2025 · 7 posts · 4 votes

Aloha,

I'm a new upcoming graduate student who is attending the University of Michigan this fall. I am currently looking for housing, but see that renting out in the midwest is on the high-end of things. I have enough money to put a down payment on a house about 15/20 minutes of the campus, and feel I am more than capable to find renters quick.

Truly I just need advice on where to start, what to look for, what should I say?

I've looked at a few places in Michigan and talked to a few leasing agents but nothing sounds like what I want of what I'm looking for and I'm kind of on a time crunch. I've looked at plenty options but maybe I'm looking at things wrong? Maybe my vision is unrealistic?

Any advice helps.

Mahalo.

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Jason WrayPro Member

Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes

Kenya,

Best advice for you would be to look for a Multifamily 2-4 unit which you can use FHA or Fannie Mae fro example to buy and rent out the other units. FHA only requires 3.5% down and Fannie Mae requires 5% both up to 4 units. Fannie Mae will have the lower of the rates if you credit score is above 720 but FHA allows for a higher DTI (Debt to income) if income is tight.

Good news is both FHA and Fannie Mae will use 75% of the other units monthly rents as added income to qaulify. This goes out the window if you cannot show a rental agreement or verification of rent for current or prior rental history. This also makes for a good early investment considering you coudl move out as early as 6 months if needed and rent out all of the units.

There are some areas that would need to be discussed so that you fall into a positive explanation but its possible under a change of life circumstance reason. I had an investor who helped their son buy a 4 unit and the son rented out the other 3 units which paid for his entire mortgage plus he had a positive cash flow remainder of $750 dollars a month. That went a long way in helping him with food, books, and other costs.

If you have any questions feel free to send me a message or email and check out my profile as well.

[email protected]727-637-4289

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Jason WrayPro Member
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
1y
Kenya,
Best advice for you would be to look for a Multifamily 2-4 unit which you can use FHA or Fannie Mae fro example to buy and rent out the other units. FHA only requires 3.5% down and Fannie Mae requires 5% both up to 4 units. Fannie Mae will have the lower of the rates if you credit score is above 720 but FHA allows for a higher DTI (Debt to income) if income is tight.
Good news is both FHA and Fannie Mae will use 75% of the other units monthly rents as added income to qaulify. This goes out the window if you cannot show a rental agreement or verification of rent for current or prior rental history. This also makes for a good early investment considering you coudl move out as early as 6 months if needed and rent out all of the units.
There are some areas that would need to be discussed so that you fall into a positive explanation but its possible under a change of life circumstance reason. I had an investor who helped their son buy a 4 unit and the son rented out the other 3 units which paid for his entire mortgage plus he had a positive cash flow remainder of $750 dollars a month. That went a long way in helping him with food, books, and other costs.
If you have any questions feel free to send me a message or email and check out my profile as well.
[email protected]727-637-4289
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Scott Nachitilo
Property Manager · OK · Member since 2024 · 98 posts · 74 votes
1y
Hey Kenya,
Congrats on grad school and exploring house hacking! Ann Arbor’s market is competitive, but buying near student-heavy areas (like Kerrytown or near North Campus) can work. Focus on multi-bed homes where room rentals (to other students) can offset your mortgage. Check local zoning for rental compliance, and use tools like the BiggerPockets Rental Calculator to ensure cash flow.
Partner with a realtor who understands investor goals (not just leasing agents) and act fast—turnover here is quick. Your vision isn’t unrealistic, but prioritize numbers over “perfect” aesthetics.

Good luck!
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
1y
As others said you can rent rooms or buy a place with a legal suite and live in that and rent out the rest of the house. But first, you need to talk to a loan officer to find out if you qualify for a mortgage. You may need your parents to co-sign as you won't be making much money as a grad student and you need your own source of income to qualify for a loan. I bought my first place while in grad school (and my parents co-signed the loan though I made all of the payments). I also rented out one of the rooms (it was a condo because Vancouver, BC is expensive-even back in the day).
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
1y
Your view of rents is skewed by where you've lived in the past and comparing that to a VERY popular => expensive area like Ann Arbor.
Locally, look for a 2-4 unit property that will qualify for FHA 203(k) financing.
- This will allow low down payment and the 203(k) allows repairs to be financed into the purchase mortgage.
- The 203(k) will allow you to bid on properties that need repairs that won't qualify for a traditional mortgage => less competition => better purchase price.

You will need to find a great local contractor you can trust to supply the required bids to qualify for the 203(k).
- After closing, you can do some of the work yourself to save money, but the program doesn't allow you to pay yourself.

You will want to buy a Class B property, maybe Class C+, in an area that seems to be improving. You want a property that has the highest probability of maxing out on appreciation.

Once done, you would want to explore the options below to maximize your rental income:
- STR
- MTR
- Rent by Room

You should go into this understanding YOU will live in the worst unit - in an illegal unit in the basement if you can!
- FYI: it's only illegal to try to rent it out, the property owner can usually legally live in a nonconforming basement unit.

If you do all this you may still negatively cashflow each month, so make sure your income can cover and/or your cash reserves.

If you do this successfully, you will learn more in 1-2 years than you would reading here on BP for 5+ years:)

Good luck:)
[email protected]248-209-6824
Logical Property Management4.9460 Reviews
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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Hi Kenya, if you're looking to buy near the University and rent to other students, focus on properties with 3–4 bedrooms and solid rent potential, especially those within 15–20 minutes of campus, ideally near bus lines or with parking. Your vision isn't unrealistic, but you might be overanalyzing. Run the numbers (rent vs. all expenses), get preapproved ASAP, and partner with an investor-friendly agent who knows the local rental market.
[email protected]614-490-1163
Kerlous Tadres | Reafco Real Estate541 Reviews
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