Prospective House Hackers- What is holding you back?

[Brett Stander]

Hello BP Philly, 

If we have not talked before, my name is Brett Stander- I am a realtor, Property Manager, and (hopefully) soon to be house hacker. 

If you are at all involved in the Philadelphia Real Estate scene, you would most likely agree that finding good deals for Multifamily units (especially those in safer areas) are hard to find. 

My two cents, to keep it brief: With the incredibly low interest rates at the moment, people who never invested in real estate are sticking their money into C+ - A+ assets, paying the mortgage and building equity. 

With this, however, the inventory is incredibly low. Especially for a good deal in a safer area. 

For me, this has been holding me back from getting into a house hack. 

My question: If you are thinking about house hacking, and you are looking in the city, what has been holding you back? The majority of us on this site have thought about house hacking for a while- if you are not taking the leap now, why not?

[Natalie Schanne]

@Brett Stander - depends which version of house hacking you're doing. I just sold a 4/3 townhouse in Fishtown Philadelphia minutes from the SEPTA for $467k. The owner bought it as new construction for $415k 2 years prior. It was a 4 bedroom 3 bathroom, approx 2700sf, 4 level + roof deck townhouse. Because of the 10 year tax abatements, his mortgage payment was around $2000/month. The basement level was 1 bed 1 bath, so he rented that. 1st floor (where you walked in) was kitchen and living room. 2nd floor was 2 medium side beds and 1 bath, so he rented that to two other people. 3rd floor was 1 large primary bedroom with private bathroom. Top floor was hallway-accessible roof deck. Overall, income was greater than his 2000/month mortgage, so he lived in his own house for free, and it appreciated. I thought this was a better deal than some of the luxury new construction duplexes in the area costing $500-550k because if you're not sharing at least part of your space, there's approximately 0 chance your rental income exceeds your mortgage unless you're operating a business like Airbnb, which has its own headaches and guest drama. Almost every duplex scenario I've reviewed shows the best you can hope to get is to subsidize your living so the other side's long term rent is paying 60-70% of your mortgage. Since I'd rather live for free, I like living with other people in my home.