How can an Owner-Occupied single family home be an investment?

Question

Hi all i am a new real estate investor and just bought my first rental property a few months ago and now have it all rented out. I have been living in my home I grew up in and next year I am looking to move out . I am thinking since I want to continue my real estate journey if I should buy a duplex and just live in it and rent the other half out as opposed to buying a single family. can a single family home that you live in be considered an investment at all? I live in new jersey. just asking for personal experience or insight. still got some time until I look to move out next year.

Brandon Weis · Answer

Any asset you buy that provides income is an investment.

Whether the home in your scenario is considered an investment or not really boils down to your goals with the property, but it also doesn't really matter. What matters are your actual goals with the property. You can buy a single family home, live in it for a year, then rent it out afterwards, and that would effectively be an investment property after you moved out, but you also got the more beneficial terms of it being a primary residence loan.

You could buy a single family home and rent out bedrooms while you are living there, and that would effectively be an investment property, but again, you have the more beneficial terms of a primary residence loan.

I wouldn't get caught up so much on if a property you buy is an investment immediately so much as I would focus on what your goals are and how each purchase would be step towards your goals, whether that is house hacking or just buying investment properties you don't live in.

Daniel Vineis · Answer

ya absolutely. most people just recommend multi family because it allows you to offset your income while living there without having roommates. also they tend to cash flow better so if the plan is to do this year over year making sure the rents cover your DTI when you move out is very important. I would say figure out a 5 year investment plan. How many houses you want to purchase and will they all be house hacks etc. Then figure out a standard of living your comfortable with and that will tell you weather or not single family or multifamily is the correct route for you. Strictly speaking from a financial point of view multi family's almost always make more sense unless your walking into some equity in a single family.

Jonathan Greene · Answer

Some of the best investments I have ever made were homes I lived in. You live in New Jersey, one of the appreciation capitals of America, especially Northern NJ. People forget that you are allowed to enjoy your houses and also make money on them.

Doug Durgee · Answer

Buying a primary residence and then making a rental out of it is one of the simplest ways to afford a rental in the beginning. If that's your plan, I'd just say let the numbers influence the purchase more than emotions.

I'd also suggest considering getting a HELOC on any houses while they're still your primary. That way, the money will still be available to you for years after moving out. And you can always get another HELOC on whatever new place you move into as well. In a market like NJ, appreciation will help you build equity quicker.

Wale Lawal · Answer

@Brandon Morgan

Duplex to house hacks offer immediate income, equity building, and a smooth scaling path. Single-family homes in New Jersey have appreciation potential, appeal to a broad tenant pool, and are easier to sell. Lenders offer favorable terms for owner-occupied multi-family homes, making duplexes a good option for financing. House hacking can be used to build portfolios and gain experience with tenants while offsetting living costs. A single-family home can still be an investment with the option to convert it to a rental. The choice depends on personal goals and lifestyle preferences.

Good luck!

Ayelet Wiedermann · Answer

@Brandon Morgan, congrats on purchasing your first investment property! Yes, you can absolutely invest in single family and it can be a great investment. Keyrenter is a national franchise with over 10,000 properties under management across the country, and while we do manage multi-family, we primarily manage single family homes for investors. There is certainly much to be said for this strategy!

There are pros and cons to both SFR and MFR from both a strategic and financial perspective. Feel free to reach out, I'd be happy to jump on a call and walk you through it.

Shawn Mcenteer · Answer

Hi @Brandon Morgan SFR and MFR both work in New Jersey based on the strategy.   SFR is much more difficult because of taxes, purchase price and rent generate but if you are open minded to a rent by room strategy or mid term rental strategy SFR can look more attractive.

MFR on the other hand tend to look much more attractive for buy and hold purposes.  Although taxes and purchase price may be more with a multi family the fact that there are multiple units for rent tend to be much more income being produced.

House hacking Duplexes is how my wife and I got to Fi. We actually started with a SFR but after running the numbers and seeing how much more we  could me with a Duplex we ended up selling the SFR and buying a duplex.  Hands down one of the best choices we made.   I have clients that invest both ways what it really comes down to is your situation and goals.

Julia Lyrberg · Answer

Congrats on your first rental property! Buying a duplex to house hack—living in one unit while renting the other—could be a great move if you want to keep building your portfolio. It helps with cash flow and offsets your mortgage costs while you gain more experience as a landlord. A single-family home can still be an investment if it appreciates or if you plan to rent it out down the line, but a duplex gives you that built-in rental income right away.

Mike Paolucci · Answer

Yes, a single-family home you live in can be an investment property. If you're still living in it, you can rent it out by the room to multiple individuals or even as a live-in STR depending on your risk tolerance & city ordinances.

Buying another single family isn't a bad idea, and neither is buying a duplex. It really depends on what your goals are.

House hacking a duplex is a great way to start scaling your portfolio to more doors. I'm a big fan of doing that and am house hacking a duplex I bought last year right now.

Ryan Konen · Answer

Yes, a single-family home you live in can be considered an investment, especially if it appreciates in value over time. However, it won’t generate rental income like a duplex or multi-family property. If you're planning to live in it long-term and then rent it out later, it could become an investment property, but you won’t have that immediate cash flow benefit.

How can an Owner-Occupied single family home be an investment?

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