House Hacking: Condo vs. SFH

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House Hacking: Condo vs. SFH

Austin Eberle
Rental Property Investor · Phoenix, AZ · Member since 2020 · 12 posts · 8 votes

Hello everyone,

My name is Austin and I'm currently a house hackee in my brothers' investment property. I reside in the Phoenix area and am looking to purchase either a single family home or a condo as my first property to house hack instead of continuing to pay my brothers' mortgage. I'm currently paying $600 a month to live in a room and share a bathroom, so my idea is if I can pay anything less with either a condo or a single family home then it would benefit me. I plan to use an FHA loan with 3.5% down. I could most likely get a 2 bedroom condo for around 60K-120K with a $100-$200 HOA fee and have the down payment ready right away. If I were to get a single family home then it would take me another 5-6 months for me to save up the amount of money for a down payment on a 3 bedroom home between 200K-250K. I'm mainly asking people's thoughts on my situation and if I should wait to purchase a single family home or jump on getting a cheaper condo right away? Thank you in advance!

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Zach Kracht
Investor · Austin Texas · Member since 2019 · 13 posts · 8 votes
5y

Hey Austin,

I went with the single family route it gives you a little more flexibility, more space to rent out additional rooms or add an addition in the future. Either way you go house hacking is a great idea and I plan to continue for another 2-3 years.

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  • Zach Kracht
    Investor · Austin Texas · Member since 2019 · 13 posts · 8 votes
    5y

    Hey Austin,

    I went with the single family route it gives you a little more flexibility, more space to rent out additional rooms or add an addition in the future. Either way you go house hacking is a great idea and I plan to continue for another 2-3 years.

    1Reply
  • Melanie Johnston
    Real Estate Agent · Scottsdale, AZ · Member since 2018 · 412 posts · 366 votes
    5y

    @Austin Eberle

    I just tried to post current listings for both condos and single-family homes in your price ranges, because I thought they might help you in your planning.

    My message got nixed by the BP police.

    So let me just say how smart it is of you to start building your own portfolio after seeing how your brother has started to build his.

    Of course the more rooms in your house hack, the more people contributing to your mortgage.

    Hopefully you could get the return you are looking for with a three- bedroom single-family home with a low or no HOA.

    Best of luck!

    Melanie

    0Reply
  • Molly Bustamante
    Homeowner · Phoenix, AZ · Member since 2020 · 5 posts · 2 votes
    5y

    Hi Austin!

    I think where you are planning on purchasing would help you make that decision. If you plan to stay in the metro-Phoenix area single family homes can get pretty expensive. A condo might be more reasonable for your price range. However, if you go more west you can easily get a single family home in your price range but it might be harder to find renters for house hacking IMO. 

    1Reply
  • Andrew Powers
    Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y

    Hi Austin, either works, consider the pros and cons of each in terms of investment (cashflow, coc, appreciation potential, etc), exit strategy, personal preference on property type / location. My house hack decision was more between single family and small multi family. More single family homes are available in locations I wanted to live, and there's more financing options. I went with a 4bd 3ba house using a 3% down payment first home buyer loan. Good luck in your decision 

    1Reply
  • Evan Westerman
    Gilbert, AZ · Member since 2020 · 14 posts · 4 votes
    5y

    Hey Austin I'm in the valley to and thought I would just add my 2 cents.

    I went with a condo for my first house hack, also read what the HOA covers because some of these have higher monthly but offer a bit more with paid water utilities etc.

    I went that route instead of SFH. I don't have to worry about outside maintenance or any major capex expenses, we don't have a lot of physical possessions and were both out of town quite often and they feel a sense of peace knowing its in a "gated community"

    1Reply
  • Austin Eberle
    OP
    Rental Property Investor · Phoenix, AZ · Member since 2020 · 12 posts · 8 votes
    5y

    @Evan Westerman

    Hi Evan! Thank you for taking to time to respond. I never thought about some HOA's possibly including some utilities. It's also encouraging knowing that you were able to pull it off here in the same market as me.

    1Reply
  • Evan Westerman
    Gilbert, AZ · Member since 2020 · 14 posts · 4 votes
    5y

    of course, Have you been working with an agent?

    0Reply
  • Austin Eberle
    OP
    Rental Property Investor · Phoenix, AZ · Member since 2020 · 12 posts · 8 votes
    5y

    @Evan Westerman

    Yes, she has been absolutely great and actually helped my brother and mother get into their current houses they live in. 

    0Reply
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