New to house hacking. Need Advice.

[Sat Palshetkar]

I am a 29-year-old fresh graduate Canadian PR holder living in Toronto, looking for a tech job. I recently heard about house hacking and decided to buy my first multi-family real estate in Ontario using house hacking. 

I have been running some numbers on the properties I got from websites like realtor.ca but every time there is a negative cashflow of approximately CA$1,000. My goal is to create a positive cash flow (however small) from day 1 of getting tenants. Is that likely to happen or would I be paying some amount from my pocket even after renting other units and staying in the smallest one?

I am very new at this. Any advice here would be much appreciated :)

[Ryan Thomson]

@Sat Palshetkar 

I wonder if your criteria may be a little unrealistic for the current market.

House hacking is tough to cashflow in year one (with current house price run-ups and interest rates) for a couple reasons:

1. You are living in one of the rentable units

2. You are only putting 5% down so your loan amount is much larger and therefore your mortgage payment.

I would consider your net worth ROI. What I mean by this is considering how much your down payment returns to your net worth (appreciation, loan paydown, tax benefits, AND rent avoidance). Don't forget to include rent avoidance in your numbers! You have to live somewhere.

You may need to lower your return or cashflow expectations so you can get into a house hack that will allow you to avoid throwing rent money away every month. You know this, but don't forget all the other ways real estate makes you money. Paying down your mortgage and owning an asset that will appreciate over the long term.