Rent by the Room House Hacking in DFW

[Tomas Valladares]

Hi BP Community!

I am looking for any advice on what to look for when analyzing a house hack outside of my monthly payment. I'm planning to do a rent-by-the-room house hack in DFW after I graduate from college in May of 2023. I've analyzed several 4/2 SFHs by now and am expecting to have to pay around $200-400 a month which is lower than what I pay now for housing. Outside of that, I'm not sure what the typical IRR or CoC return to expect from a house hack is in the first few years. Are these important factors in analyzing a house hack?

Also, I understand that rates are higher now and are expected to increase as the FED warned. Is it wise to rely on the potential of refinancing at a lower rate in a few years in order to cash flow after I move out? I haven't found any properties that would cash flow after moving out if I am putting 5% down. Below is an example of a typical property I am finding in my area. Assuming I can rent out 3 bedrooms for 700 each, I would be covering $313.12 in this example:

https://www.calculator.net/ren...

Again, any feedback at all would be greatly appreciated. Thank you!

[Devin Gillespie]

One thing I did underestimate was the property taxes. Also be aware that if you are planning to furnish the rooms and market as STRs, Dallas in particular issues a separate occupancy tax for that. I would look for opportunities to add value and increase your rates, which would help keep you living for cheap or free. Best of luck!