House Hacking a Single Family v.s. Multifamily - Is it THAT different?

[Jake Andronico]

The short answer: Yes. 

There are pros and cons to both, and also key differences to consider for your financial and familial situation. 

Below are some key differences (in my opinion) after successfully house hacking two single family homes and renting each out by the room: 

House Hacking a Single Family

Pros: 

- Likely no existing tenants - Purchasing a vacant property allows you to do what you want, when you want. (Renovations, rental timing, moving in, moving out, etc.)

- It's a Swiss Army knife - You can live in it, rent out certain rooms and not others, do LTR, MTR, STR, students, rent it out fully once you move out, etc. It's extremely flexible.

- Selling - If/when you resell, you reach ALL of the market. You can sell to an owner occupier or an investor to get the highest price for your house hack. 

Cons:

- Space - you're likely directly sharing space with your tenants. There are ways to mitigate, define space, etc. But, if you're renting by the room in a typical Single Family home, this is difficult to avoid. 

- Parking - This one varies on a case by case basis, but if you're filling up a 4-5 bedroom house with tenants that all have cars and you have a car or multiple cars, parking can be an issue. 

- Laundry - When I was sharing a house with 4 college students, the laundry machine was almost always running. I found myself occasionally going to a laundry mat or doing wash and fold. 

House Hacking a Multifamily

Pros: 

- A defined living space - When you are in one unit in a multifamily property, you likely have more privacy, overall safety, and more peace of mind. 

- Ability to renovate while living there - If you're handy, you can renovate a unit WHILE living in it, which is the ultimate hack in my opinion. If you move into the remaining unit(s) year after year and repeat this process, on year 2-4 you can have a fully renovated multifamily hopefully performing at it's highest and best use. 

- Residential financing - The benefits of diversified income sources with the advantage of low money down fixed rate conventional financing. 

Cons: 

- Selling - this may be controversial, but hear me out. If/when you resell, not everyone wants to buy a 2-4 unit property. There are less available, but there is also considerably less demand. Investors don't ALWAYS buy small multifamily, but people typically always buy homes no matter the market. 

- Older Inventory - this varies from location to location, but typically small multifamily is much older than new single family homes that are always being built. This may mean that there are more capital expenditures and upkeep with small multifamily as opposed to a newer single family home (but not always). 

- Assuming Current Tenants - this also varies location to location (check your local laws), but in most places you will need to assume and adhere to the current leases that are in place. If you need to move into the property for an FHA/Conventional loan, you may not be able to due to the tenants leases expiring long after closing would take place.

There are many more pros and cons for each, but these were the main ones that immediately came to mind. 

What do you house hackers out there think? Any more to add? Do you agree, disagree? 

[Benjamin Sulka]

Spot on. Especially regarding the cons of small multifamily. 

Most multifamilies are bought and sold by investors and they have to make it a viable investment if they plan to add it to their portfolio. If the market or rents haven't appreciated significantly, it would be hard to sell a multifamily at a price much greater than what you originally bought it for. 

Assuming current tenants is a game changer because you literally cannot live in the property until the tenant's leases are up which I would assume means you can't qualify for owner occupant financing. You couldn't put 3.5% down FHA to buy a property that has leases that don't expire for several months. I'd love some clarification here.

A potential con that I would add for house hacking a single family would be having to deal with more individual lease agreements because you're renting rooms to many different people. I'd imagine turnover would also be a bit higher because most people don't want to have roommates for several years. Since you've done this strategy, I'd love to hear your take Jake! 

All the best! 

[Bonnie Low]

I think it's true that 2-4 unit multi-families have historically been the realm of investors, but with the new FHA financing and the hype around it, I think this may be changing. More people than ever before are aware of the benefits of investing in real estate even if they don't consider themselves "investors". The small multi-family, particularly if you're going to househack one unit, makes a lot of sense in many markets. Bigger Pockets along with the multitude of podcasts and social media out there have done a lot to introduce new people to investing so I think we're going to see more "casual" investors entering the market if/when rates come back down because they recognize the value of having all or part of your living expenses covered.

[Jake Andronico]

Quote from @Benjamin Sulka:

Spot on. Especially regarding the cons of small multifamily. 

Most multifamilies are bought and sold by investors and they have to make it a viable investment if they plan to add it to their portfolio. If the market or rents haven't appreciated significantly, it would be hard to sell a multifamily at a price much greater than what you originally bought it for. 

Assuming current tenants is a game changer because you literally cannot live in the property until the tenant's leases are up which I would assume means you can't qualify for owner occupant financing. You couldn't put 3.5% down FHA to buy a property that has leases that don't expire for several months. I'd love some clarification here.

A potential con that I would add for house hacking a single family would be having to deal with more individual lease agreements because you're renting rooms to many different people. I'd imagine turnover would also be a bit higher because most people don't want to have roommates for several years. Since you've done this strategy, I'd love to hear your take Jake! 

All the best! 

Yes, exactly Ben. At least in Nevada, when acquiring multifamily (or single family for that matter, but they're usually vacant) you must adhere to the tenants current lease. 

And yes, with individual leases renting by the room there is more turnover (and arguably headache). 

[Jake Andronico]

Quote from @Bonnie Low:

I think it's true that 2-4 unit multi-families have historically been the realm of investors, but with the new FHA financing and the hype around it, I think this may be changing. More people than ever before are aware of the benefits of investing in real estate even if they don't consider themselves "investors". The small multi-family, particularly if you're going to househack one unit, makes a lot of sense in many markets. Bigger Pockets along with the multitude of podcasts and social media out there have done a lot to introduce new people to investing so I think we're going to see more "casual" investors entering the market if/when rates come back down because they recognize the value of having all or part of your living expenses covered.

That's a good point, Bonnie. I do think that it's certainly gaining popularity. However, at least here in Northern Nevada, the vast majority of small multifamily purchases are not owner occupants. 

Sometimes simply because it's impossible, due to needing to adhere to the current leases in place which may extend out a ways (we just looked a duplex that had a tenant until May of 2025). 

 That being said, I do agree to some extent and think there is more demand than ever for small multifamily as it has really taken ahold of the social media scene :)

[Benjamin Sulka]

Trying to get into a small multifamily before there is too many "casual" investors. Don't need anymore competition than there already is haha

[Carlos Ptriawan]

Quote from @Jake Andronico:

The short answer: Yes. 

There are pros and cons to both, and also key differences to consider for your financial and familial situation. 

Below are some key differences (in my opinion) after successfully house hacking two single family homes and renting each out by the room: 

House Hacking a Single Family

Pros: 

- Likely no existing tenants - Purchasing a vacant property allows you to do what you want, when you want. (Renovations, rental timing, moving in, moving out, etc.)

- It's a Swiss Army knife - You can live in it, rent out certain rooms and not others, do LTR, MTR, STR, students, rent it out fully once you move out, etc. It's extremely flexible.

- Selling - If/when you resell, you reach ALL of the market. You can sell to an owner occupier or an investor to get the highest price for your house hack. 

Cons:

- Space - you're likely directly sharing space with your tenants. There are ways to mitigate, define space, etc. But, if you're renting by the room in a typical Single Family home, this is difficult to avoid. 

- Parking - This one varies on a case by case basis, but if you're filling up a 4-5 bedroom house with tenants that all have cars and you have a car or multiple cars, parking can be an issue. 

- Laundry - When I was sharing a house with 4 college students, the laundry machine was almost always running. I found myself occasionally going to a laundry mat or doing wash and fold. 

House Hacking a Multifamily

Pros: 

- A defined living space - When you are in one unit in a multifamily property, you likely have more privacy, overall safety, and more peace of mind. 

- Ability to renovate while living there - If you're handy, you can renovate a unit WHILE living in it, which is the ultimate hack in my opinion. If you move into the remaining unit(s) year after year and repeat this process, on year 2-4 you can have a fully renovated multifamily hopefully performing at it's highest and best use. 

- Residential financing - The benefits of diversified income sources with the advantage of low money down fixed rate conventional financing. 

Cons: 

- Selling - this may be controversial, but hear me out. If/when you resell, not everyone wants to buy a 2-4 unit property. There are less available, but there is also considerably less demand. Investors don't ALWAYS buy small multifamily, but people typically always buy homes no matter the market. 

- Older Inventory - this varies from location to location, but typically small multifamily is much older than new single family homes that are always being built. This may mean that there are more capital expenditures and upkeep with small multifamily as opposed to a newer single family home (but not always). 

- Assuming Current Tenants - this also varies location to location (check your local laws), but in most places you will need to assume and adhere to the current leases that are in place. If you need to move into the property for an FHA/Conventional loan, you may not be able to due to the tenants leases expiring long after closing would take place.

There are many more pros and cons for each, but these were the main ones that immediately came to mind. 

What do you house hackers out there think? Any more to add? Do you agree, disagree? 

I am combining househacking with live-in-the-flip-BRRR strategy achieving target of 1.40 DSCR on Single Family. After careful calculation I would go with Single Family only. I could get the same rent from duplex at SF by converting room/adding bathroom, then live in the property, do househacking it again and after two years , sell it out for free tax gain, repeat....i am on my second cycle right now.

[Jake Andronico]

Quote from @Carlos Ptriawan:

Quote from @Jake Andronico:

The short answer: Yes. 

There are pros and cons to both, and also key differences to consider for your financial and familial situation. 

Below are some key differences (in my opinion) after successfully house hacking two single family homes and renting each out by the room: 

House Hacking a Single Family

Pros: 

- Likely no existing tenants - Purchasing a vacant property allows you to do what you want, when you want. (Renovations, rental timing, moving in, moving out, etc.)

- It's a Swiss Army knife - You can live in it, rent out certain rooms and not others, do LTR, MTR, STR, students, rent it out fully once you move out, etc. It's extremely flexible.

- Selling - If/when you resell, you reach ALL of the market. You can sell to an owner occupier or an investor to get the highest price for your house hack. 

Cons:

- Space - you're likely directly sharing space with your tenants. There are ways to mitigate, define space, etc. But, if you're renting by the room in a typical Single Family home, this is difficult to avoid. 

- Parking - This one varies on a case by case basis, but if you're filling up a 4-5 bedroom house with tenants that all have cars and you have a car or multiple cars, parking can be an issue. 

- Laundry - When I was sharing a house with 4 college students, the laundry machine was almost always running. I found myself occasionally going to a laundry mat or doing wash and fold. 

House Hacking a Multifamily

Pros: 

- A defined living space - When you are in one unit in a multifamily property, you likely have more privacy, overall safety, and more peace of mind. 

- Ability to renovate while living there - If you're handy, you can renovate a unit WHILE living in it, which is the ultimate hack in my opinion. If you move into the remaining unit(s) year after year and repeat this process, on year 2-4 you can have a fully renovated multifamily hopefully performing at it's highest and best use. 

- Residential financing - The benefits of diversified income sources with the advantage of low money down fixed rate conventional financing. 

Cons: 

- Selling - this may be controversial, but hear me out. If/when you resell, not everyone wants to buy a 2-4 unit property. There are less available, but there is also considerably less demand. Investors don't ALWAYS buy small multifamily, but people typically always buy homes no matter the market. 

- Older Inventory - this varies from location to location, but typically small multifamily is much older than new single family homes that are always being built. This may mean that there are more capital expenditures and upkeep with small multifamily as opposed to a newer single family home (but not always). 

- Assuming Current Tenants - this also varies location to location (check your local laws), but in most places you will need to assume and adhere to the current leases that are in place. If you need to move into the property for an FHA/Conventional loan, you may not be able to due to the tenants leases expiring long after closing would take place.

There are many more pros and cons for each, but these were the main ones that immediately came to mind. 

What do you house hackers out there think? Any more to add? Do you agree, disagree? 

I am combining househacking with live-in-the-flip-BRRR strategy achieving target of 1.40 DSCR on Single Family. After careful calculation I would go with Single Family only. I could get the same rent from duplex at SF by converting room/adding bathroom, then live in the property, do househacking it again and after two years , sell it out for free tax gain, repeat....i am on my second cycle right now.

That's an impressive DSCR, especially on Single Family!

Glad to hear it's worked so well for you. 

[Carlos Ptriawan]

Quote from @Jake Andronico:

Quote from @Carlos Ptriawan:

Quote from @Jake Andronico:

The short answer: Yes. 

There are pros and cons to both, and also key differences to consider for your financial and familial situation. 

Below are some key differences (in my opinion) after successfully house hacking two single family homes and renting each out by the room: 

House Hacking a Single Family

Pros: 

- Likely no existing tenants - Purchasing a vacant property allows you to do what you want, when you want. (Renovations, rental timing, moving in, moving out, etc.)

- It's a Swiss Army knife - You can live in it, rent out certain rooms and not others, do LTR, MTR, STR, students, rent it out fully once you move out, etc. It's extremely flexible.

- Selling - If/when you resell, you reach ALL of the market. You can sell to an owner occupier or an investor to get the highest price for your house hack. 

Cons:

- Space - you're likely directly sharing space with your tenants. There are ways to mitigate, define space, etc. But, if you're renting by the room in a typical Single Family home, this is difficult to avoid. 

- Parking - This one varies on a case by case basis, but if you're filling up a 4-5 bedroom house with tenants that all have cars and you have a car or multiple cars, parking can be an issue. 

- Laundry - When I was sharing a house with 4 college students, the laundry machine was almost always running. I found myself occasionally going to a laundry mat or doing wash and fold. 

House Hacking a Multifamily

Pros: 

- A defined living space - When you are in one unit in a multifamily property, you likely have more privacy, overall safety, and more peace of mind. 

- Ability to renovate while living there - If you're handy, you can renovate a unit WHILE living in it, which is the ultimate hack in my opinion. If you move into the remaining unit(s) year after year and repeat this process, on year 2-4 you can have a fully renovated multifamily hopefully performing at it's highest and best use. 

- Residential financing - The benefits of diversified income sources with the advantage of low money down fixed rate conventional financing. 

Cons: 

- Selling - this may be controversial, but hear me out. If/when you resell, not everyone wants to buy a 2-4 unit property. There are less available, but there is also considerably less demand. Investors don't ALWAYS buy small multifamily, but people typically always buy homes no matter the market. 

- Older Inventory - this varies from location to location, but typically small multifamily is much older than new single family homes that are always being built. This may mean that there are more capital expenditures and upkeep with small multifamily as opposed to a newer single family home (but not always). 

- Assuming Current Tenants - this also varies location to location (check your local laws), but in most places you will need to assume and adhere to the current leases that are in place. If you need to move into the property for an FHA/Conventional loan, you may not be able to due to the tenants leases expiring long after closing would take place.

There are many more pros and cons for each, but these were the main ones that immediately came to mind. 

What do you house hackers out there think? Any more to add? Do you agree, disagree? 

I am combining househacking with live-in-the-flip-BRRR strategy achieving target of 1.40 DSCR on Single Family. After careful calculation I would go with Single Family only. I could get the same rent from duplex at SF by converting room/adding bathroom, then live in the property, do househacking it again and after two years , sell it out for free tax gain, repeat....i am on my second cycle right now.

That's an impressive DSCR, especially on Single Family!

Glad to hear it's worked so well for you. 

 it's very niche strategy and the home that's suitable for these strategy are more or less a geographical feature, so it's not something people can find in any region for the strategy to be duplicated. But once I identify such niche I can keep repeating the business without too many competitors lol , I see house that has such combination of feature only available once per every two months.  

Certain area has their own uniqueness, for example, SF in Milwaukee (another of my own OOS) has duplex features in two floors approach , they created solely for househacking, the old immigrant that built to these neighborhood 80 years ago, having the same layout top and bottom for househacking. Now I sell the same house for OO that would also do househacking.