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Updated 7 months ago, 05/30/2024
Update on how it turned out on our Househack / STR strategy and got our money back!
Investment Info:
Single-family residence buy & hold investment in Wakefield.
Purchase price: $825,000
Cash invested: $41,250
May 2022: We bought a single family home with an ADU north of Boston in the town of Wakefield MA. We will renovate the fix up the first floor additional dwelling and plan to rent it out as a STR for the rest of 1st year to maximize the return of our renovation expense against our W2 taxes via the Cost Seg / Bonus Depreciation. Will find out how well we execute our plan. The long term play would be to pivot to MTR/LTF afterwards.
What made you interested in investing in this type of deal?
We are looking for our next house-hack with an additional dwelling unit that we can rent out. Our strategy was to renovate, rent it out as a STR (short term rental), and manage it ourselves to qualify for the STR tax benefits in the year 2022.
How did you find this deal and how did you negotiate it?
We found this deal in the MLS and actually paid above asking list price.
How did you finance this deal?
Conventional loan with a 5% down payment at 3.125% (this was in May 2022).
How did you add value to the deal?
Renovated the additional dwelling unit which is a 3 bed / 1 bath space spanning about ~1000 sq ft and added landscaping / hardscaping for guests to sit out and enjoy the shared backyard.
What was the outcome?
We successfully rented it out as STR by the end of the year, setup and managed ourselves, did cost segregation studies and got back 100% of our money invested thru tax refund for year 2022.
Lessons learned? Challenges?
The challenge was finding the right property to execute the house-hacking / STR strategy and also to find the right contractors and vendors to manage a quick timeline and cost of the renovation. We learned to rely on our network to find the right people for the type of work we needed.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Our Agent / Advisor for this project was Lien Vuong (excellent experience and highly recommend if you are in the Greater Boston Area).