All Forum Posts by: Dave Kay

I also want to add in - there's probably room to improve the features of these units, therefore increasing the rents, but I'm not sure how high would be too high in this area. Any thoughts on that would be appreciated as well. 

I'm looking for my first house-hacking investment in the Austin, Texas area but am running into a couple of issues. 

I was considering an SFR and renting out rooms, but I'm starting to think I'll get better renters/less vacancy/an all-around better experience if I find a multi-family unit.

I came across a few multi-family units in the mid 400's. They're duplexes and have 2-3 bedrooms and 1.5 - 2.5 bathrooms per unit. It seems like they're renting anywhere from $1200-$1500 (in 78729, which seems to be a sufficiently decent part of town?). My issue with this is, with full occupancy, 15% maintenance/capex, 8% vacancy, 5% PMI, etc, I'm looking at -$600 a month approximately. Meaning if I take up one of the units, or even 1 bedroom in a unit, I'm out more like $1K or more a month. 

Questions: 

1. Are my numbers right here? Am I missing something? Are these duplexes just too expensive to be worthwhile, or is this about right/fair in Austin right now? 

2. At what point do the numbers make sense/not make sense? I'm really hoping to at least break even if fully occupied. But perhaps it's worth it for the equity gain and the potential appreciation of rent in the coming years? Plus I'll save a couple hundred a month when I lose that PMI?

My goal is to be able to use this property as a stepping stone to buy another next year, etc and start seeing some cash flow coming in. I also have the flexibility to consider other markets as I work from home (and will for the foreseeable future), but I know this area and like it more than most. 

I'm seriously considering going for one of these, and then seeing if I can find a way (through upgrading the units, etc) to make the numbers make sense. 

Any and all insights would be appreciated!

Thanks all! @Marian Smith I work remotely so I don't have to worry about the commute for myself. Fair point about the train station and other thoughts

That's a fair point. Thank you!

Thanks @Ryan Kelly! I am flexible time-wise. Sooner rather than later is better of course, but I'm not in a rush. I have my pre-approval as well and I've gone out to many properties (resale and new construction) to see what the options are. I'll see if I can take a closer look at some of the activities available in Leander. Would you say house hacking is similar in those two cities? 

That's a great point, thank you @Ryan Kelly! It's been a while since I lived in the area (just moving back now), but I did like the Kyle/South Austin area feel. I prefer living in a more suburban area too, I'm just not too familiar with Leander and what North Austin has to offer. It seemed like things like grocery stores were more sparse in Leander when I went to look, but perhaps that's due to it being earlier in it's development? Looking forward to hearing more. Thanks!

Hi all, 

As I continue my search for my first house with which to house-hack, I'm leaning more towards the suburbs as opposed to in the city (I think the % rent to price is probably better per room in the suburbs - although I'm open to other opinions). I'm thinking about Kyle and Leander primarily, but am also asking about the broader North Austin and South Austin markets. 

I'm more familiar with South Austin, as I used to work in San Marcos. I feel like Kyle seems like an up-and-coming family, suburb type area. I think that's a good sign, as long term I might rent to a family.

However, it seems like North Austin has better schools. I'm not sure if that's a sign showing that area will attract more families, and/or more people in general? I'm hearing the Domain is where a lot of jobs are coming to, and that's in North Austin I believe?

I'd love to find a multi-family still, but it doesn't seem I can find a good deal on one, so I'm considering house hacking in a SFR. Would love to hear your thoughts on the two markets, and am happy to hear any other thoughts as well. Thanks!

P.S. Zoning restrictions seem like 4 unrelated adults are the max that can live in one residence in many cities in this area. This makes Multi-family that much more appealing, but again, still very hard to find. But it makes me reconsider a 6 bed house, and instead target a 4 bed. 

@Account Closed what sort of difference in rent do you think I might see if I go closer to the city as opposed to Kyle and/or Buda? 

Thank you both! @Jordan Moorhead what makes you advise 4 beds? I'm starting to consider this more and more - the complication of 6 beds may be more than I give it credit for. I like the idea of duplexes as well, but it's harder to make the numbers add up. I envision I'd still be in the hole for at least a few hundred dollars a month, and I'm not sure I'd love the part of town I found myself living in. But I do like the concept.

Thanks @Bryan Noth! The multi-family was an appealing idea to me, but I came across a couple of questions which detoured me to SFR. Perhaps you could help me resolve them.
1. Are there multi-family units available where I could meet my cash flow goals? e.g. to meet the 1% rule I could see doing with bedrooms in an SFR, but find multi-families to be selling for a LOT more for the bedroom/bath count. Is that common? Should I be reviewing them differently? When you say off-set debt service, do you mean reducing my true cost of the mortgage by having the family in the other unit pay a majority of the mortgage? But I would still own a bit of the mortgage myself in monthly costs?
2. The neighborhoods are a tricky question for me. I see far less multi-family units on the market, but also have been advised that they are generally in more "rough" areas. Is that always the case? Is there a way to review multi-family units in areas that might be better for me to be living in? I can see owning multi-family, but most of the multi-family I've looked at seems like I wouldn't want to live right next door to my tenant (again based on neighborhoods, safety, etc). 
Oh wow, good to know about county and city zoning, thank you! I had no idea that was something to be aware of regarding unrelated adults. Right, good point about conversion to standard single lease properties down the road. I'll take another pass at the MLS and see if I can find a 4/3 that might add up numbers wise. Do my target rents sound about right to you?