Does house hacking only work if you make profit or live free?

[Jordan Santley]

Hello!

My wife and I have around 22K saved up and we want to try to house hack.  We are both brand new to real estate investing.  We have a baby on the way so are mostly looking at multi-family homes.  The real estate marked in the Chattanooga/Cleveland TN area is crazy right now and everything is up by about 40%.  Obviously we would need to look for a great deal and that leads me to my question:  Is house hacking only worth doing if you make a profit or break even?  My wife thinks that even if we have to pay $300 out of our pockets for the mortgage, then it's still a good idea to do.  I know it would be good to have as a rental when we move out after a year or two, but we wouldn't have any more money but our savings to put towards another investment later if we weren't making a profit.  I appreciate any insight!

[Tjimon Louisy]

Will caveat this with everyone’s goals and idea of a “good deal” will be different. When it comes to house hacking, the ultimate goal is indeed to live for free/ make profit, but by no means is having to come out a pocket for a small amount a loss. If that amount is significantly less than rent you would have had to pay, then you are “making” money through the money saved (this is not even accounting for equity you are building). You would definitely want to underwrite the deal for when you move out in the future to ensure it make sense, but there is nothing wrong with house-hacking for more than 1 year to build up savings to snatch up the next property.