House hacking in Western Washington

[Joseph Donan]

Hello all!

I'm new to the bigger pockets forum so if this has already been posted please let me know!

I'm currently house hacking a rental in Thurston County (3bd 3 bath with 2 roommates and my fiancee) but I'm looking to purchase a duplex/triplex when the lease is up in October 2020.

If anyone has experience with house hacking I would be really interested in hearing anything you have to say. I'm currently very concerned from the property management aspect. 

How would you rate the overall experience and why?

Should I rely on the rental income to help supplement the mortgage or should I be able to cover the mortgage based on my current Jobs income?

Should I use a property management service?

If you have any feedback or words of wisdom for me, please feel free to share them!

[Jake DeAtley]

Hey @Joseph Donan, Fellow Olympian chiming in! Some of these answers would be based on your risk tolerance and handy skills. I am house hacking in Tumwater right now and own and self manage 16 doors currently. As it stands, I am living in a 4 bed/2 bath and rent out the 3 other bedrooms to some long time friends. I have had to set very clear expectations up front, and its gone very smoothly (we have been roommates long before I bought the house). I have had basically no maintenance expense for the last two years, and its been a breeze. Some of my other doors on the other hand have been more challenging with maintenance and misc. issues like water heaters going out, broken pipes in the winter, etc. If you are not prepared for these things by having good contractors, or being handy yourself, then it can be stressful, but if you put systems in place, it can be fairly easy. Regardless, contractors are very expensive from my experience, and I am a professional buyer for my day job, so I think I do a pretty good shopping and negotiating, but expect to pay more than you'd want for contracting services. It does take a certain personality type to handle rentals, so if you dont think you can be firm but fair and friendly, and unless you have a desire and spend time understanding the local laws, then I would recommend property management. Olympic Rentals has been good from my experience. You can put yourself in a bad situation if you dont know the landlord tenant laws in our area.

As far as relying on the rental income, this is where your personal risk tolerance comes into play. I would not be happy to have to all of a sudden foot the mortgage in full on my own and although I could technically afford it, it would be a financial burden. I would suggest you should have at least 6 months of reserves built up if you would be experiencing negative cash-flow from having to pay the full mortgage in such a situation, and probably more like 12 months. If you could technically afford it without taking on debt, then you wouldn't have to have as much reserves. I hope that helps. Happy to chat more if you are interested.