Is a fourplex right for me as a first home buyer?

[Mohammad Murad]

Hi, I am trying to purchase my first home, a fourplex. My plan is to househack by staying in one unit and rest out other three. I have already analyzed my deal in the Rental property calculator, its coming out a negative COC ROI. Here is the breakdown of the deal:

home price: $380K
rental income: $3600/per month (4 units)

Need expert opinion on the deal. 

[Alecia Loveless]

@Mohammad Murad With a house hack you typically have negative cash flow and negative ROI while you're living there. The idea is to HELP offset your cost of living, not totally replace it. Replacing your cost of living will be almost impossible in most markets currently due to high prices and higher interest rates.

I’d look at how long you plan to live there first as the longer you live there typically the higher you can raise rents organically due to inflation and the overall cost of living increasing every year.

I’d also analyze the deal based on if the numbers will return to the positive side once you move out.

Another thing to take into consideration is that your tenants will be paying down the mortgage every year building you equity in the property.

Consider the potential for tax breaks based on your interest payments and any expenses you may incur for the building that you can write off.

The last thing to consider which isn’t guaranteed or exact science is the amount of appreciation you may get year over year. (Some markets have higher appreciation than others. If you have any questions on this you might contact a few local realtors to ask about annual appreciation over the past few years.)

If after considering all these things you still feel the property will be a loss you should look for a different property.