Triplex Househack, Payoff or Leverage

[Nicholas Daniels]

Im 20 right now graduating next year. I was wondering if someone could review my game plan and help me decide what I should do. (I plan on an fha plan househack).

So I’ve kinda been planning on buying a triplex and renting out the other two units. Living in one and renting the others or “house hacking.” The thing is, assuming I can live for free in the property (meaning it cash flows after CAPex, mortgage, taxes, etc). I went with a triplex because managing two tenants will be a little more difficult than one but don’t wanna get overwhelmed with 3 in a quadplex.

Should I just bang out the mortgage with my job money and the cash from the property. I think it would be nice to have a paid off triplex and get like ~$1000/month or so from the property and not have a mortgage on it. But, if I do this I’m tying up a lot of cash that I could have used for other things. At the same time, I’m not sure I want to own a bunch of real estate. I’m more of an ETF guy, but I do wanna lower my housing expenses and eventually get paid to live in a house by the tenants.

Thanks

[Theresa Harris]

@Nicholas Daniels It depends on what your plans are.  If you plan on buying other rentals, I would let the tenants pay down the mortgage and save the other money to buy your next place.  If this is the only place you want to buy, then pay it down.

Another way to look at it is if you have $50K and could use it to buy one place or two, what would you do?  Using the $50K to buy two places where the tenants pay the mortgage will get your further ahead in the long run than buying one place, paying it off quickly and then buying a second.