Thoughts on My HouseHack Plan in Laurel MD

[Lagic Prize]

Hi BiggerPockets community! I've been watching podcasts for a while now and as I'm getting closer to making my first real estate investment, I decided to create an account with hopes that I can get specific feedback on my househack plan. 

There is a new townhome builder in the area offering multiple home designs. One of the home designs includes 5 bedrooms, 4.5 bathrooms, 2 car garage, as well as a driveway to fit an additional two cars. Being in Maryland City, where according to Niche.com, the average median rent is $1824, I'm forecasting about $900 per room. 

The goal would be either to rent out to 4 roomates living at the top of the home while I take the ground level. Or I take one of the bedrooms on the top level plus the additional ground level (3 roomates). I've worked out numbers for these scenarios which I'll display below. Btw I am 24 years old and work fully remote. 

A few notes: 

• I'm looking at the Anne Arundel housing laws and they don't mention anything regarding maximum # of unrelated roomates. The HOA for the development has assured me that I can househack as long as I'm living in the property. As for what happens if I decide to move out, I have yet to find out. I believe it may be reserved to only a family rental as opposed to renting to individual roomates. Will update as I learn more.
• In terms of the types of rentals offered - no short term/AirBnB rentals, however long term rentals are allowed. As for the minimum duration I'm not sure. I'd like to create a month to month lease because I don't want to keep a roomate if they are causing issues. Vetting properly should reduce this risk but I'd at least want the security knowing that we're not tied to living with each other if there are issues
• Aside from these two questions I have for the builder, is there any other question you'd recommend I ask the builder? Is there anything I'm not accounting for? 
• My concern is with a low downpayment and high monthly cost $3844 (PITI, HOA, PMI, utilities), this would limit my ability to ever rent out to a family if they don't allow individual leases with multiple roomates. The max rent you could charge is $3000 and thats on the high end so the flexibility here is super restricted.

Let's go to the numbers! 

The 5 Bedroom, 4.5 bathroom home features a bedroom on the ground floor, three bedrooms on the third floor, and a loft that can be converted into a bedroom in the fourth floor. The two secondary bedrooms in the third floor will need to share a bathroom but other than that the master, the first floor bedroom, and the fourth floor loft bedroom all have their own bathrooms. 

• Price - $558,000
• Downpayment - 3.5% via FHA loan? That would be $19,250. Not sure if conventional or FHA is better. I believe the builder mentioned that FHA allows for appraisal value flexibility
• Closing Costs - $7606 
• Cash Outlay.- $26,856  
• -
• Annual Mortgage Payment (only P & I) - $28,210 
• Annual Expenses (Property Tax, Insurance, HOA, PMI, and Utilities) - $17,922
• Annual Total Cost (Mortgage+Expenses) - $46,132 
• Revenue (at $900 per bedroom and 4 roomates) - $40,694
• Total Cost Per Month for Me to Live Here - $5,438 
• -
• Loan Principle Paydown - $10,378
• Total Return (Cash Flow + Amortization) -  $4940 
• Total ROI (Cash Flow + Amortization) - 18.39%
• If I decide to only have 3 roomates (possibly taking the master suite on the third floor and the ground floor) then I'd end with only $30,521 in annual revenue (however it would ensure no parking issues since all people living have a space). We will have to swap cars moving in and out since we're limited to two in the garage and 2 in the driveway. 
• -This plan would result: $15,612 cost per year for me to live here. Sidenote- crazy how one roomate makes a huge difference, this is literally 3x the cost compared to if I just rent out the room and find parking on the street or around the neighborhood- they have a few spaces throughout the development). And since the loan principal pay-down is $10,378, 
• I'd have a return of -$5234 and a total ROI of -19.5%.

[Matthew Paul]

Parking is your problem . Having a garage is great , moving cars out of the driveway to allow someone in the garage to get out will be a problem .  There wont be much street parking , and if they have a parking area they may have assigned spots , they usually give 1 or 2 per unit . 

Now , $560K is a lot of money for a townhouse , Maryland city isnt the best area of Anne Arundel county . School districts are what sell houses . I believe that feeds into Meade High school . (one of the roughest schools in the county ) . If you do have to sell you are limited to what the new construction is selling for . For what you are spending , you can find a SFH in the county in a better area .