Analyzing for Creative House Hacks

[Nick Malucha]

Hello everyone!

I am new to to the world of real estate investing, and have been spending the past few months reading books and listening to podcasts to start building a good foundation! I am most likely moving within the next year for my fiance's graduate education, and want to start off our investing journey by house-hacking wherever we end up. 

As I'm starting to analyze duplexes in the potential areas we might be living, I'm realizing that there aren't many listings on the MLS that fit within my expected price range and where the estimated rent covers a significant majority of the mortgage/additional expenses. While I'm going to continue analyzing duplexes to build up my confidence/skills, I'm also interested in other creative ways to house-hack. One area that I'd love to explore would be converting existing space within a traditional single family home into an AirBnB. Last month I stayed in an AirBnB where the owners converted the second story of their detached garage into a 1 bed, 1 bath space, and I really like that concept.

Is this creative solution a good idea for a first-time investor to dive into, or should I learn the ropes in a traditional mutli-family? 

If I do start analyzing single family homes with the intent of adding AirBnB rental spaces, is there a good rule of thumb for estimating the rehab costs? I know the best way to start estimating these rehab costs would be to get in contact with local contractors, but since I am unsure of where I'll be living and at least 6-8 months away from purchasing, I don't want to waste anyone's time.

Thanks for the help!

[Kit Serrell]

Hi Nick - I am an investor in Raleigh and I am househacking by the room using Airbnb right now. 

I was in the exact same situation when I started off. However, I am making WAY more money than I would have househacking a multifamily property. If you are okay with having people in your "shared spaces" like living room and kitchen...it would be a good way to go. I make about $1500-1700 per room and I have a 4 bedroom house (so total rental income is around $4500) and my mortgage is only $1911. Its a cash cow. I have hosted over 400 people in the last 18 months and havent had any major issues with guests. 

I bought this house in March 2021 already renovated with an FHA loan so I only needed 3.5% down and had the house fully booked within 3 days after closing. I personally think for your first one you should avoid a major renovation. If it needs more than like paint and carpet, I dont buy it for a househack because I want to be able to rent right away and I dont want to live in a construction zone.

Happy to connect and answer any additional questions you may have!