Should I buy my own house or should I keep renting?

Question

Hello! My husband and I have been planning for a year now to purchase a duplex(or tri/quadplex) snd house hack it as our first investment property. The problem with this is that there are absolutely no multifamily properties on the market in our large city (Clarksville) or near by. Every time a multi family comes on the market is if bid on like rapid fire, snd even offering $10k more than asking price and to pay all closing costs we have lost every bid we put in..

We have been renting an apartment since we moved here 2 years ago. Our rent started at about $800 and has gone up now to almost $1000. At this point it seems ridiculous to not own a house and at least be gaining equity in an asset we own, instead of continually giving someone else our money to profit off of.

So now at this point we are looking into the idea of purchasing a single family home for ourself and our small child we just had back in October 2020. We are considering trying to house hack the SF by renting out a room. But I would have to find someone perfect for it as I’m a bit hesitant with our new baby.

I also began wholesaling RE back in August 2020 and closed my first deal a week before my baby was born in October. I just have barley started marketing again and getting back into it about a week ago.

What are your thoughts? Would it be. Good or bad idea to now purchase a SF instead of wasting money on rent? Or should we keep holding out for some sort of multi family to come on the market? Again we have been waiting a year already..

Thanks!

Kate Barry · Answer

I think you should look at single families that have the potential for conversions.  Look for properties over 2500 square feet or ones that have an oversized or detached garage.  A lot of times a floor plan or layout can be reconfigured to create an auxillary unit.  Possibly even making a unit that could be used as a short term rental

Brooke Hallock · Answer

@Daniela Andreevska thank you for your response! I think what we are going to do is purchase a home to live in, instead of renting, as well as invest in a property out of state. I just really can’t stand the idea of renting any longer, feels like I’m just giving my money away when I could be at least putting my money into an asset I own. We have quite a bit of reserves we have been saving for this, so might as well do both! Thank you again for taking the time to respond, and for that information about Chattanooga

Brooke Hallock · Answer

@Ola Dantis I think I am leaning toward number 2 also! I appreciate your insight very much, thank you 🙏🏻

Theresa Harris · Answer

I wouldn't rent a room out in a shared house with a baby (and not sure who would want to rent it).  You could find a place with an in-law suite.  Buy a place now and in a year or two, you can buy a multifamily.  You can move into it to get the lower down payment and rent out the house you buy in 2021.  You need to live in it for at least a year.  Make sure you run the numbers, so you know your all in cost (property taxes, utilities, mortgage) and what the numbers would look like if you turn it into a rental in a few years.

Marc Rice · Answer

@Brooke Hallock

Buy a single family with a carriage house on the back. Live in the carriage and rent the main or vice versa.

Brian G. · Answer

@Brooke Hallock are there any sfh properties with ADUs? Often these types of properties don’t appraise much higher than a sfh but the ADU can often be rented out for a decent price. Not sure if this is true there or not. Just wonder if that’s an option.

Brooke Hallock · Answer

@Mark Pantalone thank you for your response,

I appreciate all the insight.

Brooke Hallock · Answer

@Brett Lee thank you for sharing your experience! Hadn’t thought of that.

Brett Lee · Answer

@Brooke Hallock

Years ago my wife and i struggled with our house payment etc based on my pay at the time.  We rented a room to exchange students for around 700 per month which included meals.  Not a ton of money... But might make sense for you if you have a private school near you or a community college.

Mark Pantalone · Answer

Definitely buy a single-family if you have the equity to do so. There are still a lot of possibilities to add value and force appreciation (maybe finish an attic or basement to add baths or bedroom etc) o make money. depending on the area you can still rent out the Garage, a parking spot, or build an adu unit or basement unit/ dwelling. overall buy undervalued below-market priced houses that need to be modernized or simple fixes in an appreciating town with a 3 year exit strategy or less. finding and getting a deal accepted is not easy in some markets you have to do 12 before you make it past the finish line. Here are some ideas to learn more https://investingwithahousehac...

Should I buy my own house or should I keep renting?

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