House Hacking vs Out of State vs Passive Investing vs Waiting??

[Marty Shawn]

Hello BP experts, I'm a first time home buyer. I was looking into house hacking opportunities in my local market (Boise, ID), but it seems a bit pricey. Apologies in advance for the long post!

Some poking around in Zillow/Redfin shows the cheapest duplexes/triplexes seem to be around 500k-700k, with similar single units renting for about 1000-1600$. Cheaper single families (3b2b/4b2b) seem to be between 350k to 450k roughly, and individual rooms in similar places seem to rent for about 600-800$. My job is fairly hectic, so I wouldn't have time to manage tenants and would have to get a property manager. I would have about 50-60k to spare for all initial costs including down payment, repairs etc. I have reserves, but would prefer not to put all of that in right away and hold some money for unexpected expenses.

For context, my current monthly housing expenses are ~1250$ including rent, utilities, internet etc in a decent area with a short daily commute. I would be spending much more every month if I house hack, even if I rent out other units/rooms. Does it make sense to be house hacking if your monthly expenses become 2-3x what they are now? The opportunity cost (i.e. investing the initial costs + the savings from renting each month, into an index fund) seems to be substantial even with the tax advantages of owning a home.

Unless the math is way off, with current interest rates, home prices would have to appreciate by about 5.5% or higher for the next 5-10 years to make it worthwhile to own a home here. From Zillow's home price index, I see this market has had lower growth than this since 2023 Jan (<4%), though to be fair, it overheated during COVID. I don't know what long term estimates for price growth are here now (or how I would estimate it accurately).

Would it be less risky to just invest out of state in other markets where I can get neutral or slightly positive cashflow? I was considering Columbus, Indianapolis, Huntsville, maybe Minneapolis, though I only just started looking into this. (Maybe something like rent to retirement/"turnkey")?

I've also seen advice about reaching out to local flippers to try and learn more by putting a small amount of money into their deals. But I'm not sure how I would go about doing that (or creating an agreement like that), or even vetting people for it?

OR am I thinking about this wrong and are there other instruments or assets I should be looking at to get exposure to real estate more passively? I am not an accredited investor.

Apologies again for the lengthy post, but any advice or recommendations are welcome! What would you do in this situation if you were starting out??

If I should post in a different forum, or more information is needed, let me know.