House Hacking in expensive markets - MA and RI

[Tim Holt]

Hello! I am a new investor looking to purchase my first property in Massachusetts or Rhode Island. I have built up enough savings to purchase a multifamily property with an FHA (3.5% down) loan or Fannie mac (5% down) loan. I would like to house hack as my first real estate purchase/investment.

My question is, in today's market, is house hacking still a good option? I am ok with the property not cash flowing right away, but I would like my living expenses to be minimized by a lot if I am house hacking. Ideally, I'd like to live in the property for 1-2 years, and keep it as a long-term rental property when I move out. Therefore, the property would need to cash flow when I move out and rent out all units.

Any thoughts and/or advice is greatly appreciated, thanks!

[Mackay Oakey]

The way I see it is you're comparing two options, to HH or not to HH. If the marginal cost increase in buying a house that can be house hacked (a house with a basement, a duplex, etc.) is less than the rents you expect to bring in from renting the additional space, why not do it? Not to rely on speculation, but it should get better over time (hopefully) not worse.

If the marginal increase between the two options is only a few hundred bucks and that isn't worth a few hundred bucks to you, then maybe not worth it. Run the math and see what you think.