House Hacking and Cash Flow

[Chad Lewis]

I'm still learning as much as possible and am new to real estate investing. Through all the reading I've done and podcasts I've listened to (coupled with my current life/living situation), house hacking looks like the best approach to me. However, my area (high cost-of-living) could make breaking even or positive cash flow difficult.

The main question: is house hacking worth it or a "good deal" if cash flow from the rented units doesn't fully cover all expenses but you're significantly reducing living costs?

For example (and just picking arbitrary numbers here), let's say:

Current living expense: $1,800/month

House to hack mortgage: $2,000/month

Rental income from house hack: $1,600/month

Expenses (including $400 leftover on mortgage): $800/month

In this example, I'd be losing $800 out-of-pocket per month, but I'd be able to save an additional $1,000 from my day job over my current situation that I could use toward a second property. What are your thoughts on this type of deal? What if the property were to cash flow positively after moving out and renting the unit I was using (after living there for a year to satisfy FHA loan constraints, for example)? Would that make the short-term more appealing?

I'm really interested in everyone's thoughts on this. I've seen another forum post about this, but it was a bit old and I didn't see any discussion around the possibility of positive cash flow after moving out. Let me know your thoughts!