Where should I house hack a duplex in America in the next year?

Investor · Austin, TX · Member since 2018 · 3 posts · 2 votes

TLDR: I can live anywhere in America with my remote optionality.

What are your recommended Tier 2 / Tier 3 cities I should consider if my goal is to house hack a duplex in the next year?

I moved to Austin, Texas 2 months ago, but I am afraid it's no longer viable for house hacks.

I am open to all suggestions. I have lived in WI, NYC, SF, and now, ATX.

I don't mind living in the middle of nowhere if it means I will cash flow. Big city life and night life means little to nothing to me anymore.

I value my financial freedom < all else. Let me know! All recommendations welcome. Thank you in advanced.

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Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

Obviously you’ll pick a state with no income tax, that alone might make your house payments.

After that you decide if you want the small town life in the Arctic (South Dakota or Alaska) the sun the beach and the humidity (Texas or Florida) or the dry heat of Nevada. Someone else will have to weigh in on Tennessee/Washington and Wyoming as I don’t know them. But it seems silly to pay income tax when you don’t have to.

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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
4y
@Jason Jiang dude Austin absolutely still makes sense to househack a duplex. I'm living in my 4th that I'm refinancing right now so I can do another. Reach out, I'd love to tell you how we're doing it.
Not only am I househacking a duplex in a nice area of South Austin but I am living completely for free in the bigger unit with my girlfriend, 2 cats and 2 dogs.
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Jason Jiang
@Jason JiangI would highly recommend Houston Texas, as rental income growth and appreciation here are steady.
You can be in touch with local real estate professionals like agents, lenders, investors etc. to understand the current local market.

All the best!
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
4y
Obviously you’ll pick a state with no income tax, that alone might make your house payments.
After that you decide if you want the small town life in the Arctic (South Dakota or Alaska) the sun the beach and the humidity (Texas or Florida) or the dry heat of Nevada. Someone else will have to weigh in on Tennessee/Washington and Wyoming as I don’t know them. But it seems silly to pay income tax when you don’t have to.
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Jason Jiang
OP
Investor · Austin, TX · Member since 2018 · 3 posts · 2 votes
4y
Quote from @Jordan Moorhead:

@Jason Jiang dude Austin absolutely still makes sense to househack a duplex. I'm living in my 4th that I'm refinancing right now so I can do another. Reach out, I'd love to tell you how we're doing it.
Not only am I househacking a duplex in a nice area of South Austin but I am living completely for free in the bigger unit with my girlfriend, 2 cats and 2 dogs.

I heard it is EXTREMELY tough. I will reach out. If you can help make this work for me in the next year: you will make me the happiest man in America.
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
@Jason Jiang well, we need some way of narrowing down the entire US for you =-) purchase prices are going to be lower in the mid-west as I am sure you know.
Do you have cash for a big down payment?
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
Quote from @Bill B.:

Obviously you’ll pick a state with no income tax, that alone might make your house payments.
After that you decide if you want the small town life in the Arctic (South Dakota or Alaska) the sun the beach and the humidity (Texas or Florida) or the dry heat of Nevada. Someone else will have to weigh in on Tennessee/Washington and Wyoming as I don’t know them. But it seems silly to pay income tax when you don’t have to.

The no income tax thing may not work depending on your employer's location. I live in TN (no income tax) and had to pay anyway for all those years because my employer was based in NC (income tax state). If the employer has a presence in the no-income tax state it would probably work.
As for states, I'm a big proponent of my own (TN) but honestly we have enough people here already so I would prefer everyone else go to another state 😂

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Colton Hahn
Specialist · Member since 2021 · 322 posts · 273 votes
4y
Quote from @JD Martin:

Quote from @Bill B.:

Obviously you’ll pick a state with no income tax, that alone might make your house payments.
After that you decide if you want the small town life in the Arctic (South Dakota or Alaska) the sun the beach and the humidity (Texas or Florida) or the dry heat of Nevada. Someone else will have to weigh in on Tennessee/Washington and Wyoming as I don’t know them. But it seems silly to pay income tax when you don’t have to.

The no income tax thing may not work depending on your employer's location. I live in TN (no income tax) and had to pay anyway for all those years because my employer was based in NC (income tax state). If the employer has a presence in the no-income tax state it would probably work.
As for states, I'm a big proponent of my own (TN) but honestly we have enough people here already so I would prefer everyone else go to another state 😂

I personally have lived in Florida, Indiana, and Virginia and Indianapolis has been my favorite city to live so far. Great people, jobs abound, and even greater value to be had.

At BAM, we buy in the midwest exclusively and have achieved 31%+ IRR on average over the last 12 years.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Huntsville Alabama if you're tech guy. This is the only tech place that's like Bay Area 18 years ago.

If you prefer to enjoy lifestyle then Hawaii outside Oahu.

If you just want cash flow then Indiana. Any city :p
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Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
Getting a duplex in a nice area in Cleveland would be a good option. You can get a quad plex and rent out the remaining 3 units.
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Christian EhlersBusiness Member
Real Estate Agent · NH & MA · Member since 2021 · 457 posts · 291 votes
4y
It will definitely depend if you are looking more for cashflow or appreciation or somewhere in the middle. If you are househacking you should definitely take lifestyle at least partially into consideration, as you don't want to make investing in real estate a miserable experience! Where I am at (Near Boston MA) most places on this coast are hard to cashflow well (or sometimes at all while living in the property) with a househack, but the amount of principle pay down and appreciation, and quality of tenant is much higher than other lower appreciation markets (from my limited internet research). I would say we definitely don't have the most forgiving weather in the North East as the winters can be pretty cold and the summers pretty hot, but if that's not a problem for you then I welcome you to check it out!
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Shane Kelly
Real Estate Agent · Cleveland, OH · Member since 2021 · 383 posts · 361 votes
4y
I can say that if you're looking to find something easily, Cleveland has on market properties in certain B areas that will do you well. Also, cost of living as a whole here is very cheap comparatively, so if you're looking to be frugal, this is a spot to consider!
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Nicholas MischPro Member
Investor · Broadview Hts, OH · Member since 2016 · 310 posts · 280 votes
4y
I will parrot that in Cleveland, your money can go very far on anything from a 2-4 unit. Just make sure your not afraid of a little cold and snow. :)
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Vatsal Patel
Huntsville · Member since 2021 · 14 posts · 7 votes
4y
Quote from @Carlos Ptriawan:

Huntsville Alabama if you're tech guy. This is the only tech place that's like Bay Area 18 years ago.

If you prefer to enjoy lifestyle then Hawaii outside Oahu.

If you just want cash flow then Indiana. Any city :p
Huntsville, doesn't really have a lot of duplexes.
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Peter McDonough
Rental Property Investor · Huntsville, AL · Member since 2015 · 181 posts · 136 votes
4y
Quote from @Vatsal Patel:

Quote from @Carlos Ptriawan:

Huntsville Alabama if you're tech guy. This is the only tech place that's like Bay Area 18 years ago.

If you prefer to enjoy lifestyle then Hawaii outside Oahu.

If you just want cash flow then Indiana. Any city :p
Huntsville, doesn't really have a lot of duplexes.
There are a bunch. But there are in not great areas of town.
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Patrick DruryBusiness Member
Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
4y
@Jason Jiang
I would definitely recommend Columbus OH. It's a solid hybrid market of cash flow and appreciation. Columbus has lots of job opportunities and population growth. I currently live and invest here in Columbus OH and would recommend it. Also, recently Forsee power a French EV battery company announced it will be setting up U.S. headquarters in Columbus OH which is exciting. Here is an article about it - https://www.nbc4i.com/news/col...

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Emily Wilson
Member since 2020 · 28 posts · 8 votes
4y
An article was posted just today answering this question. It shows how long it will take to break even in various metro areas.
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Andrew Olmstead
Kapolei, HI · Member since 2014 · 42 posts · 18 votes
4y
Quote from @Emily Wilson:

An article was posted just today answering this question. It shows how long it will take to break even in various metro areas.

Highly recommend Oahu or Indianapolis.
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Jason Jiang
OP
Investor · Austin, TX · Member since 2018 · 3 posts · 2 votes
4y
Thanks for all the suggestions, advice, and input everyone. I'll consider browsing deals in a 30 minute radius from downtown Austin. I can't expect to cash flow off any Austin house hack, but the principal paydown and natural appreciation would be incredibly worth it if I can pull it off as my first property. I'm not sure how I feel about living in the Midwest again after spending 22 years in WI, so I'll definitely have to deeply consider what a livable lifestyle means to me if I seriously consider relocating once again.
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Blake Schreckhise
Real Estate Agent · Fairbanks, AK · Member since 2017 · 31 posts · 14 votes
4y
Fairbanks Alaska baby! Rent rates are high and although they still haven't quite caught up the the appreciation over the past few years I expect we will see them steadily increase for the foreseeable future. Limited housing similar to the rest of US except there really aren't as many outlying towns to choose from. If you like hunting, fishing, and personal freedom it's tough to beat. You would also have to be okay with -50F in the winter. Small price to pay I say!
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Rick Albert
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
4y
You will likely get a lot of Realtors telling you to house hack in their area because they want to help you. The exception might be Jordan because he is actually doing it.
The joys of house hacking is that you can buy almost anywhere. Some areas have good appreciation (LA, SF, NY) and others have good cash flow (OH, AL, NM). It depends on what your goals are and what lifestyle you want.
I'm expanding my portfolio and looking to invest in a few markets where some may cash flow less, but have good appreciation, and others for cash flow, so therefore my cash flow averages and I have diversity.
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