Hi there! I'm excited to be starting out with an opportunity to learn through house hacking my brother's 3bd/2ba house that is currently sitting empty. Would you calculate the room rents by comparing his place to other 3bd/2ba houses nearby and dividing that total per room or with nearby 1bd/1ba apartments?
According to Rentometer, 3/2 homes nearby average $1850 (so about $600/room); 1bd/1ba apartments average $1070.
I plan to rent out two rooms with a shared full bath and share the master bed/bath with another family member. I've looked at his utility/mortgage bills and estimate that getting $1800/mo would cover all my brother's current expenses, plus setting aside 10% of his expenses for vacancy, 5% of his expenses for capital expenses, and 10% of his expenses for repairs & maintenance. This leaves him approximately $200 extra each month he can pocket.
Now, I'm not sure that is how to calculate vacancy rates, cap expenses, or repairs/maintenatnce, so please let me know if my understanding of the concept is off.
I tried fiddling with the Buy and Hold calculator with these numbers and recognize his situation is not a smoking deal. He's already purchased the house and refinanced once. My aim is to make the rent cover all his expenses, put money aside for any issues that come up, and ideally pocket a couple hundred each month.
Any advice is much appreciated--thanks all!
