All Forum Posts by: Daniel Haberkost

@Kyle Holmes That it's a viable investment once you move out with all expenses factored in. 

@Austin Woyshnar house hacking is a fantastic way to get started. I've been doing it myself for about 2 years and the best advice I can give is:

1.) Screen your tenants thoroughly as you would with a traditional unit. Background/credit check, income verification, talk to their boss, talk to their last two landlords, collect a security deposit, etc. 

2.) Set very clear expectations, since they're living in the house with you think through how you expect the arrangement to work and make sure that's communicated to prospective tenants prior to move in. For example, I tell all of my tenants before they move in that my major pet peeves are a dirty kitchen, noise at night and rent paid after the first. Consequently I've had no issues with any of these items 

3.) Be mindful of what you're planning to do when you buy the house. Mine is a split level with two living rooms a large deck and plenty of space. Point being it's easy for everyone to be in the house and still have their own space which is important.

4.) Pay attention to their schedules, I have one tenant who leaves at 7am, one at 9am and one at noon. They all leave at different times and get home at different times which makes things much easier as every person gets to use the kitchen alone. 

If you put the work in upfront to do this right it can be a fantastic arrangement. My house cash flows while I live in it and it's not even an inconvenience. I enjoy living with my tenants. There's no reason you can't do the same thing!

Hey @Cole DeLucas I second what @John Warren & @Adrienne Green said about paying down the property, it makes no sense from a pragmatic investment standpoint to pay down extra principle if your interest rate is that low.  

I've been house-hacking for two years now and it's been unbelievably impactful financially speaking. If you screen your tenants thoroughly it doesn't have to be an inconvenience either. 

I had my returns for 2019 done by a CPA and did not have to pay tax on my house hacking income. But this will depend entirely on what deductions are available to you, how you're depreciating your rentals, what tax bracket you're in, etc. so talk to a professional on that!

I want to re-emphasize what I already said about screening your tenants thoroughly. It's the biggest reason why my house hacking experience has been very positive while some of my friends have had not so positive results. You HAVE to screen your tenants just as thoroughly as you would for a traditional rental. Background/credit check, income verification, talk to their last two landlords, talk to their boss, move-in inspection, security deposit, etc! Putting the work in up front will save you a lot of time and headache down the road!

@Wade Megan My house (which I house hack) is in village 7 which is on the north east side of town. I like this area because many of the homes are split levels that function much like duplexes.

It’s also been easy to get very responsible tenants on this side of The Springs at maximum rents.

Great choice, CO Springs is a beautiful city! Since you're looking for something that will need a bit of rehab that budget it doable (for single family at least). Supply here is incredibly low but if our current situation continues for too long I'm sure that will start to change. Have you explored the city? Do you know what part of town you're going to look in?

I'm at 5/6 but the 6th one is usually there by the 5th. As many prior posts have stated, I think May and June are going to be the months where we see more delinquent tenants.

@Kris Russell I filled two of my units in the last 3 weeks BUT my market has almost no supply and extremely high demand so it depends on your local market. A substantial part of our economy is military/healthcare which is obviously not slowing down right now. 

Whether your tenants try to avoid rent largely depends on your screening process. Nobody could have anticipated a pandemic but since you'd be placing the tenant in the middle of the crisis most of those who have lost their jobs have already done so. Verify income as you normally would, run their background/credit and talk to their last two landlords. 

At the end of the day, what determines whether you should buy is the property. If you find an undervalued deal in an good area then buy it. Of course you want to be sure you have the funds to do so as well, if it takes every bit of cash you have to close on the deal that's risky. You want to be sure you have reserves. 

 Hey Justin, this is a fantastic market to house hack in. There's substantial demand for single rooms for rent so it's easy to be selective in your choice of tenants. Message me anytime if you have any questions.

I agree with @Marcello Di Gerlando that @Colin Smith is an excellent option for a realtor, I used his firm to purchase my house hack here and him and his team are extremely knowledgeable on investing and the local market. 

 Hi Thomas, 

If you're going to start with house-hacking be sure that the numbers work on the property even if you're not living there. Also, make sure you have your systems down for screening tenants. Background/credit check, talk to their last two landlords and talk to their boss as references. Make sure you're standards/expectations are clear (i.e. don't make noise past 9pm, cleanup after using the kitchen, etc.) Do a move-in inspection report on their room and have them sign it so there is no ambiguity as to the condition of the room when they moved in. 

I wouldn't worry too much about future deals until you get the first one under your belt. I've never owned a town home but I believe they often come with hefty HOA fees. However, if the numbers work it doesn't matter!

Good luck!

-Dan

@Jameson Gowin okay so you do want to grow your portfolio. Using the equity in your properties is a great way to do that but the whether or not it end up being a good decision is dependent on whether you buy a good deal.