Good or Bad Deal?

Question

Omaha Nebraska, very close to a University Campus.

It's a duplex and estimated monthly rent per unit is $1200. I plan to live in one unit

My monthly payments would be roughly around $1700. I currently pay $1500 in rent so I believe this would be a good house hack for me.

Inspection brought out common issues that would be easy fixes. The roof and HVAC is new.

I did the numbers and the property won't cash flow until I rent out both units. Even if it did cashflow, it would be a very small amount.

Any thoughts?

Kelechi Chibuikem · Answer

I guess my biggest concern is repairs even though the inspection came out good. It's an old house and as a first home buyer, I'm not confident in my knowledge you know. My goal is to upscale eventually.

I've never owned a property before. I just hope I don't get overwhelmed with been a landlord.

Rick Albert · Answer

How much are you putting down?

You don't typically cash flow immediately with house hacks. Otherwise traditional investors would be swooping these up.The fact that you can already cash flow after moving out is better than many house hacks.

If your numbers are right, including accounting for weather related maintenance, I would jump on it.

What is your biggest concern that would make you write this post?

Bo Smith · Answer

House hacking near campus is smart - student renters are usually consistent. One thing I'd add: factor in vacancy allowance even with students. Maybe 5-10% of gross rent set aside monthly. When you move out eventually, will both units still rent for $1200 or does one need to drop since it won't be student-focused? Have you stress-tested what happens if rent drops to $1100 on one side?

Aaron Zimmerman · Answer

Not a bad deal but not a great deal. You're saving $1,000 compared to what you're paying after PITI. With all expenses, maybe that number is a couple hundred bucks.

given that the property will help reduce housing expenses and cash flow upon move out, I'd consider it to be a win.