House hacking in Texas(Austin) during pandemic?

Question

I am trying to get an up to date idea of what investors currently think about a newbie doing their first house hack in Texas (Austin) in the middle of the Covid-19 pandemic.

I have spent the last few hours searching/reading every thread I could find on this forum regarding it, and even found a podcast by Craig Curleop, where it sounded like he said it's a bad idea for first time buyers.

My concerns are the following:

1. Not getting tenant rent

Question: I am curious, how are others WHO ARE HOUSE HACKING doing with getting tenant rent? I would be particularly interested in people who are house hacking a SFH during this pandemic.

It is one thing to get a family into a unit in a duplex, but I can see more challenges with getting multiple separate individuals to be your tenants/roomates during a pandemic.

Also, its usually recommended to do month-to-month leases for SFH house hack so you can feel your tenants out.

But given financial risk, that is a harder decision to make.

Thoughts related to this:

(As the economy continues to worsen... On the one hand, I did see a post a month ago saying Austin jobless claims are going down. On the other hand, govt has also been passing stimulus checks and people let off the hook with rent moratoriums. Truth is, Covid-19 wont likely be "over" until next summer given how long it will take to mass distribute a vaccine, and looking back at Spanish flu. Thats just the medical aspect. Economic aspect, who knows. And we have elections coming up...)

I think this means its even more important that if I do move forward with a purchase, to be extra conservative (Can hold the mortgage with 0 tenants for as long as needed, even if that were 1+ years).

2. WFH Logistics: What type of jobs do your house hack tenants work? If they are Work From Home now, where are they actually working if they have a small bedroom and no office space? Are you selling them other space in your house like they can put an office in the dining room? How much more difficult is it to house hack a SFH right now?

3. Covid-19 risk exposure if I house hack a SFH (aka have roommates)

Johnny Wolff · Answer

@Andrew Bissada - we have 21 roommate houses in the midwest and even one in Austin.You'll be fine and I'd encourage you to move forward as I would at any other time. 99% of rent collected across 120 rooms this year.

Jordan Moorhead · Answer

@Andrew Bissada I don't speculate but I don't believe any of my tenants will have trouble either. They're all employed and I haven't missed a rent payment out of 22 units the whole time during this pandemic.

Nick Sheveland · Answer

Just do it! If you're looking for reasons not to do it that's all you'll ever find. Know your numbers and have your lender and agent ready.1. I've collected everything 100% on time and in full.2. My tenant is a vet tech so her job is awesome and I don't have to worry about her one bit.3. SF hacks can be good cashflow but I don't like having lots of roommates and someday when I decide I don't want to self manage anymore it would be much harder to find a property management company to manage by the room. That being said I recommend a 2 - 4 unit that has at least 1.5 baths on each side. Then you could even get a roommate on your side.

Ryan Kelly · Answer

@Andrew Bissada If tenants are working from home they can work in their room or at the dining room table as we all do. Don't forget when you are renting out a room, it is likely 50% cheaper than a 1-bedroom apartment and that's what makes it so attractive to many tenants. Plus, they actually get more space because they can use most of the home and backyard as well.

Andrew Bissada · Answer

Thanks. What are your predictions for when the govt stops giving out money. They are in debt now and it will have to stop eventually. How do you think this will impact your rents?

Andrew Bissada · Answer

Thanks! I guess people who WFH wont be renting rooms then?I am planning on getting a 3-4 bedroom if I do a SFH. I would use 2 of them myself (1 bedroom, 1 office). I would went to 2 tenants/roommates.

Andrew Bissada · Answer

But if they are renting a room, where are they going to work if they are WFH? They have less space than if they have an entire apartment unit to themself and can put their desk anywhere.

Ryan Kelly · Answer

@Andrew Bissada House hacking is a great strategy in Austin as renters are fleeing apartments and looking to move into homes with yards, driveways, and more square footage. I have several clients renting rooms out and significantly lowering their rents. Start with education and network with people who know more about the strategies you are planning to implement.

Jordan Moorhead · Answer

@Andrew Bissada1. All of my tenants have paid. Out of 22 units, none have not paid. Some have been late but everyone is current now. The gov just threw out money to everyone.2. All of mine are at least 2 units, not renting bedrooms.3. I would just be courteous and be sure to follow all of the protocols recommended. Wear masks, sanitize, etc. Getting a covid test yourself and asking roommates to do so may go a long way. The antibody test is quick and easy!