I am new to real estate investing. We currently have one rental property that is fully paid off, generating $2,150 per month in income, with expenses around $1,000. We are now considering house hacking by buying a neighbor’s house due to our kids' school proximity.
Our monthly expenses for our current home are $3,000, and the estimated rental value is $2,300-$2,350. Our goal is to buy and hold for long-term investment. Based on the 1% rule, this doesn’t seem to make sense.
However, the city and area we live in retain property value because of the schools, community, and location. Could you advise on whether we should pursue house hacking and rent out our current home?
I am new to real estate investing. We currently have one rental property that is fully paid off, generating $2,150 per month in income, with expenses around $1,000. We are now considering house hacking by buying a neighbor’s house due to our kids' school proximity.
Our monthly expenses for our current home are $3,000, and the estimated rental value is $2,300-$2,350. Our goal is to buy and hold for long-term investment. Based on the 1% rule, this doesn’t seem to make sense.
However, the city and area we live in retain property value because of the schools, community, and location. Could you advise on whether we should pursue house hacking and rent out our current home?
Only YOU can decide if you should move forward….. Some properties take years to become profitable. We don’t know your financial position so only you can decide if this is right for you.
Real Estate Agent · Austin, TX · Member since 2022 · 121 posts · 67 votes
1y
I agree, with Joe, it does come down to you and how comfortable you are with house hacking and if it makes sense for you financially and for your family. So you would need to look into is losing about $700 a month is worth it and can you deal with that for a period of time. If it retains value and you plan to hold on to it for a while, it could be a possibility.
If your goal for house hacking is not to cashflow immediately it may make sense if you're paying a significantly less amount in mortgage and expenses on your house hack because the other side is effectively helping pay that amount. For instance, it may look like paying the $700 difference of renting your current property plus whatever your portion of the house hack would be (hopefully a significant amount less) and being similar to what you pay now or maybe a bit less depending on what you get for the house hack. That's just one scenario.
But again it depends on what you can handle and what makes sense financially, I couldn't give you a perfect answer on what to do.