SFH House hacking Tips

[John Hourani]

Hello BP community,

I will be graduating from NC State in may and am looking to purchase my first rental property through house hacking in order to get in with a low down payment. Originally, I was hoping to find a duplex to house hack, which may still be possible, but with the very limited amount of these in the Raleigh area, I have started to switch my thinking to house hacking a SFH. I feel that it would be the same idea as a duplex house hack, I would just be a little closer to my future roommate/tenant. I'm looking for someone who has done a SFH house hack to talk to about some of the specific challenges that came with living with their tenant. If you house hacked a SFH with roommates who you were already friends with, I would still like to hear from you, but ideally I'm looking to talk with someone who has done a SFH house hack with roommates/tenants that they did not previously know.

P.S. I'm set up to get pre-approved in early april and my current lease ends in late July.  So I will be looking to close on a property before then. 

Thanks!

[Kenneth Jackson]

Couple good questions here John, I'll share with you my thoughts.

I'd look for a SFH in up and coming areas. Knightdale, Wendell, and the homes near the RTP might be possible depending on your price range. Multifamily is priced high in the Raleigh area, depending on where you're looking at 350-500k in an established area. Look for 3/2 bathrooms so that you're not all sharing a bathroom and so that you can have two roommates to offset the cost of the mortgage.

I've had many friends graduate from NC State and do exactly what you're suggesting. Do you not have friends graduating and staying in the area? Having individuals you know that are getting full time jobs is always preferable and a great way to start out. If you go the route of looking for new roommates, I'd come up with an application/questionnaire process just as if they were tenants of a unit you didn't share with them.

Side note, but Scott and Mindy's recent episode on their money podcast and the recent BP podcast would be great for you. One point Scott makes is that having the imposed deadline (for you, lease up in late July) of having to get a place in that time frame may create some emotions and added stress that you could avoid by signing a month to month, preparing and understanding what kind of property you want and being able to be on your toes in this hot sellers market. Scott's suggestion of using previously sold homes on ZIllow is fantastic, I'd try that method so you know what you're criteria is.

Best of luck, and happy to help should you have further questions.