Should a duplex house hack cash flow ??

[Alton Guyton]

Looking at a house hack duplex, If both units were rented it would cash flow pretty well but with just one unit rented its about $300 a month with all expenses considered. Being that i'm going to live in it for a year then rinse and repeat, i was thinking it may work out. i'm also considering i currently pay $900.00 in rent (sigh) lol. should  I not persue this property ??

[James Ehrig]

Hey @Alton Guyton,

House hacking is definitely worth it.  The very first deal I did was a house hack with a duplex and is still working out fantastic.   Be aware of all of the expenses involved and be realistic. $900 per side in rent with a mortgage of $1200 does not equal only $300 a month for a payment.

The expenses to consider are:

Principal (on mortgage)

Interest (on mortgage)

Primary mortgage Insurance (when applicable: typically 1% of mortgage)

Property Tax (1%-3% of assessed value)

Property Insurance (.4%of assessed value)

Maintenance (8% of rent)

Management ( 8%-10% of rent should always include management even if you plan on managing)

Utilities (people tend to forget about this one... Because it is a duplex chances are the water is not metered separately and sewer lines are also tied together. Therefore the owner will typically pay for these. Water, Sewer, and Trash could add up to $150-$200 a month.)

Reserves (for Cap X)

Vacancy (5%)

Good luck!