Monthly Gross Income

[Berkay Talay]

Hello All,

Your expertise is needed here… I am planning to purchase a duplex and I do want to take advantage of house hacking... What should my thought process be concerning monthly gross income receiving for rent? I’m sure it will be depending on the dwelling area, but what is the rule of thumb?

Thanks in advance!

[Matthew Kwan]

HI Berkay,

House hacking is always a good way to start your real estate journey. The house hacking is that it allows you to put minumum down payment 0%-5% depending what loan program you use. Ususally, people would use FHA to invest in multifamily as it only requires you to put as little as 3.5% down payment. However, if it's 3-4 units, FHA has a test called the self sufficiency test where your appraised gross rental income of 75% has to be greater or equal to your monthly mortgage payment. It is definitely achievable in TX.

As for conventional, there is no self sufficiency test but the down payment tends to varies from 5%-20% down payment depending how many units are there. The more unit usually will require more down payment,but lesser mortgage insurance than FHA and no ss test. There is always a tradeoff on both sides

@Carlos Valencia @Albert Bui