House Hacking in the Bay Area - Advice for a Newbie

[Oli Cimet]

As a new real estate investor living in the crazy expensive Bay Area rental market, I'm exploring clever ways to get into investing. My husband's job requires us to stay near San Francisco, so we rented a place way above our means last year at $5k per month and looking to move out asap.

I'm now looking at house hacking in Oakland where prices start around $550k. Not ideal, but it beats pouring money down the rental drain when we could build equity instead.

Is Oakland a good market for house hacking? Should we keep renting and invest out of state instead? As a total newbie, I'm torn between the options.

Any advice would be hugely appreciated! Thanks in advance! 

OLi

[Harrison Chow]

Quote from @Oli Cimet:

As a new real estate investor living in the crazy expensive Bay Area rental market, I'm exploring clever ways to get into investing. My husband's job requires us to stay near San Francisco, so we rented a place way above our means last year at $5k per month and looking to move out asap.

I'm now looking at house hacking in Oakland where prices start around $550k. Not ideal, but it beats pouring money down the rental drain when we could build equity instead.

Is Oakland a good market for house hacking? Should we keep renting and invest out of state instead? As a total newbie, I'm torn between the options.

Any advice would be hugely appreciated! Thanks in advance! 

OLi

Hi Oli,

Thank you for sharing your situation with me. It sounds like you're in a tough spot trying to navigate the expensive Bay Area rental market while considering your options for real estate investing.

House hacking in Oakland can indeed be a viable option, especially considering its proximity to San Francisco and the potential for building equity rather than continuing to pour money into high rental costs. However, there are a few factors to consider when weighing your options:

1. Market Dynamics: Oakland's real estate market can be competitive, but it also offers opportunities for house hacking, particularly in neighborhoods where prices are more reasonable. It's essential to conduct thorough market research to identify areas with potential for rental income and property appreciation.
2. Financial Considerations: While purchasing a property in Oakland may allow you to build equity, you'll need to evaluate whether the rental income from house hacking covers your mortgage, taxes, insurance, and other expenses. Calculate your potential cash flow to ensure the investment aligns with your financial goals.
3. Out-of-State Investing: Investing in out-of-state markets like Columbus, OH, could offer advantages such as lower purchase prices, higher rent-to-purchase ratios, and landlord-friendly laws. Columbus is experiencing growth, making it an attractive option for real estate investors. Additionally, investing out of state diversifies your portfolio and spreads risk.

Ultimately, the decision between house hacking in Oakland and investing out of state depends on your financial goals, risk tolerance, and ability to manage properties remotely. I recommend discussing these options with your husband and possibly a financial advisor to determine the best course of action for your situation. 

Let me know how I can help!