Hi Kanti,
Hope you have been enjoying the weather here in the Bay Area thus far compared to the midwest.
Just to make sure I understand, your husband and yourself can't afford the monthly payment of a SFR but you would be able to afford a duplex due to renting out the 2nd unit? From what I read it as, it says you can't afford a SFR but can afford a Duplex. Which technically doesn't add up.
It is a great idea to house hack anywhere. It is a great initial stone into home ownership. For areas with good rental income equals higher cost for property acquisition. You can't go wrong with the majority of cities within San Mateo County & Santa Clara County.
Specially in San Jose, areas to avoid would be East Side San Jose. Anything along Monterey HWY. Subdivisions such as "Cadillac East" / "Eden" which is along Hamilton Ave/Winchester Blvd/San Tomas EXPY. Many pockets of Downtown you want to avoid.
Other than that, majority of the South Bay is great. But again, great areas means higher purchase prices.
The first step for you and any buyer, would be to speak with multiple lenders and get pre-approved. From there, you'll have your max budget set and you'll know exactly what to look for in terms of pricing. A question I would have you is where do you and your husband work? Because if you have to commute everyday, most would imagine you want to be as close as possible to work.
There is a lot of details, information, etc, behind this entire subject.
