Analyzing Deals for a House Hack

[Andrew McCartin]

I'm using rent by the room house hack strategy for a SFH in the DC area, and I'm curious to hear about the experiences of others who used (or are using) the same strategy, specifically as it related to others account for rental income long-term.

When you moved out of your first house hack, did you continue to rent by the room, or switch to renting the whole unit?

[Russell Brazil]

Originally posted by @Jaysen Medhurst:

In a HCOL area like DC, a SFR is highly unlikely to be profitable after you stop house hacking, @Andrew McCartin. If you have a $500k, 4-bed house you might be able to make is work when renting out each room. But there's no way you're getting close to 1% as a SFR renting to one tenant. If taxes are high and you went in with a low DP...

The flip side is to continue to rent by the room, which is going to be a nightmare once you move out. This is the rub with house hacking a SFH. Exit strategies (other than selling) can be tough.

 Ive got a DC property that has free cash flow of $1800 a month, thats $21,600 a year.  My down payment was $53k. So this year alone it will return 41% of the down payment. And the cash flow is just 1 part of the return. The $25k rise in value year over year, and I will make back the entirety of that down payment this year. 

HCOL areas have about a 75 year history of having higher IRRs than the LCOL areas.