Buy another SFH or House Hack?

Buy another SFH or House Hack?

Rental Property Investor · Wauwatosa, WI · Member since 2017 · 156 posts · 99 votes
Hello All, Veteran BP Podcast listener and newbie to the forums. I understand that this topic has probably been discussed any number of times in the forums, but I haven't been able to find anything that satisfies my need for a data driven decision maker. Here's my situation: I recently purchased my first rental (a SFH). I am trying to decide whether to continue buying SFH or look to buy a MFH so I can house hack. I lean towards the SFH due to the tenants that they attract, which tend to lead to less headaches, lower maintenance costs, and a lower vacancy rate (or so my logic leads me). However, I am also attracted to the lower MFH CAPEX. One roof over four units beats four roofs. Here's my question: I have yet to find data that can be used to decide, with reasonable confidence, whether the lower CAPEX of a MFH offsets the potentially higher vacancy and maintenance costs as compared to a SFH. Does anyone have data on their portfolio that could be used to analyze this? Any help or further guidance would be much appreciated. Thanks, Josiah
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  • Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Josiah Kay

    I have no rental properties nor do I have any data to give you. What can I can offer is a reasonable opinion on this matter. The route of house hacking an MFR allows you a greater ROI since you can get multiple units with one down payment and that down payment is pretty low using an FHA loan should you qualify for it.

    Though MFR's offer lower CapEx, they also have higher maintenance costs as there more units to watch over. That is of course the trade-off from getting 4 units at once. But being able to watch out for 1 roof and 1 boiler (I don't know much about boilers as I have never seen one in person. I'm assuming the building would have one) and one yard also cuts down on the repair costs of having to do that over SFR's.

    Scalability happens faster with getting MFR's and house hacking would allow you to live for free if the rents are good enough. Hard to say no to "free" living. Of course nothing is free as there are taxes and other associated costs, but you catch my drift.

  • Colorado Springs, CO · Member since 2016 · 84 posts · 48 votes
    9y
    I bought a SFH, when i could of bought one of three duplexs down the road.... i regret it every day i drive by and when i pay for that mortgage out of pocket
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