Airbnb or house hacking?

Question

Hey everyone, I am fortunate to be able to say that I have two potential options here. I'll preface by stating I am a complete newbie to real estate, however I have followed BP for about 10 years now.

Option #1: House hacking

I am currently unemployed, but have a chunk of savings for a downpayment (roughly 50k) if I decide to go the route of house hacking. The question here is, if you were currently unemployed, but could put down a reasonable downpayment for a house, how would you do it? How could you get approved for a loan? is it even possible? if so, could you suggest the most efficient way to acquire my first home?

Option #2: Glamping

A relative has raw land with amazing views. I envision it to be perfect for a retreat or glamping/off grid Airbnb operation. I have played with the idea of putting an off grid tinyhouse on the property to see how it does and grow (or not) from there.. The major downside is the rugged road through the property.

Given these two options, I'm just curious what you guys and gals with the experience think of it and what direction you would go if it were you in my shoes. I really appreciate any advice!

Rachel Davis · Answer

Hi Forrest, welcoming to the addicting world of real estate investing!

In all honestly in your situation, I wouldn't put any money into real estate until securing stable employment. Real estate is a very expensive game and you need to make sure that you are financially stable and able to withstand potential losses. Patience is a virtue.

Getting a mortgage without a job will be near impossible without going with an alternative loan product that will come with a high down payment and high interest, which is not the "househacking" way.

Jake Andronico · Answer

@Forrest Hollingsworth

Congratulations on saving what you have!

I agree with @Rachel Davis. I would secure a job before jumping into a property. If you HAVE to sell for whatever reason, you become a motivated seller.

I'm bias, but I've house hacked twice in Reno, NV and it's changed my life. It's the absolute best way to start IMO. Glamping and dealing with raw land sounds amazing, until it's not.

If you're in San Jose, you're in one of the most expensive RE markets in the US. If there is anyway to move to a cheaper location in CA or out of state that would make your $50K go a lot further.

Best of luck to you!

Denis Ponder · Answer

I would house hack if those are the 2 options. I'm not a glamping expect, but it seems like that might be a harder niche in which to compete the further COVID gets in the rearview mirror. Again, just my opinion, not based in much fact. With a house hack, you are actually owning an asset that other people might want. If you HAD to sell the glamping arrangement for some reason, the list of potential buyers would be smaller and likely only to attract investors. So, getting top dollar could be more challenging.

Forrest Hollingsworth · Answer

Thank you for your response Rachel. sound advice! That has certainly been a major conflict and heavy on my mind. I have under the table work that pays great, but it is more less temporary. I appreciate the advice!

Airbnb or house hacking?

Airbnb or house hacking?

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