All Forum Posts by: Angelica Rose

I'm interesting in small-scale real estate investing to start with, after saving over the next 2-4 years. I'll be staying in NYC long-term, so my cost of living is higher. I make 50k, taking home way less after taxes. With good saving habits and cutting out my cab habit, I can save 6,000 per year. Not much, but it's what I can do. I've also convinced my parents to let me sell my car back in Baltimore, which could get me anywhere from 5,000 at the worst to the ideal of 10,000. Keep in mind I will also be going to grad school and taking out that loan sometime in the next few years as well.

My question is how on earth do I do both (saving and investing) without completely depleting my savings after 2-4 years and starting from scratch all over again ?

Also, note:

I would love to make a small scale version of house hacking work, renting out rooms in purchased condo. But out of state investment, perhaps back in Baltimore, may make more sense in terms of entry cost. (And then I could hopefully use that money to buy something in NYC, as I do want to stay here long term and would like to own in one of the more affordable areas in the outer boroughs like Sheepshead Bay, Riverdale, Forest Hills, etc.)

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Thanks for your advice, however, I moved to NYC from a less expensive area. Staying here is the priority for me.

As I mentioned in my original post, I did consider investing in a cheaper market - Baltimore, where I'm originally from. However, I do want to invest in some property here for myself. House Hacking seemed to be a good fit for that.

Originally posted by @Tim Puffer:

@Angelica Rose - you can definitely break even or better househacking. On my current duplex I'm house hacking I was actually getting $100 more than PITI until insurance renewal and a tax increase. I'm now breaking even.

I have something for you to think about though - could you get a job doing what you’re doing in another state making the same amount of $$ or more where the cost of entry into real estate would be lower for you?

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I'm curious about this. As someone pointed out, the req. here is often that you make 80x more than the monthly payments would be. I only make 50k before taxes and I'm single. I would like to "house hack," and rent rooms in a decently popular area, while living in the space myself. I would need a massive loan. How to get this?

Also what kind of strategy is best for this scenario? I was thinking I should aim to have a few months to a year in mortgage payments saved up to account for time finding tenants and then time to sell the property if it doesnt work out.

This would be a few years from now, as I need to save more, but I'm very interested.

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Can one use a guarantor in the same way that you would to rent apartments with less than sufficient income? I could use both my parents as guarantors and the total of us combined would be enough. If that is possible, would I still be the owner?

Originally posted by @Jonathan Twombly:

Originally posted by @Angelica Rose:

Main Questions: What does it mean to "breakeven" when renting out a room in your property? Is it worth it to invest in your own property in an expensive city like NYC? Or do you think one should focus on "real investing"? Is investing out of state a wise decision for someone only making 50K (before taxes) in an expensive city ?

Is it possible to actually have your roommate paying most of your mortgage in an expensive city like NYC, via house hacking?

Background:

I'm in the process of saving up so that I could possibly get some property in NYC in about 2 years. I've heard a lot of people talking about House Hacking. This seems like a win-win to securing property in NYC, given costs of rent are likely to increase and there's some sense of security. (Although, condos and coops often have maintenance fees). I've also considered investing in property outside of NYC, but it's more intimidating and I'm not even sure I should be one doing that, as I'm relatively young (28), not wealthy at all, not married, and am just beginning to build up my savings. The downside is that I give up the freedom to live in whatever neighborhood I want to - I could only afford a handful of neighborhoods further out in the boroughs. I dont mind the longer commute and I suppose I could always rent both rooms in the property out and start renting again.

Sorry for all the thoughts/questions. I'm trying to work through what my plan will be. Thanks!

I have not house-hacked, so take this with a grain of salt, but I am thinking about it from the financial perspective, and it's analogous to owning a two- or three-family house, where you live in one of the units and rent out the others. The idea is that the rents on the other units cover the cost of the whole property.

The way this would work is that you need an apartment with three or four bedrooms. You rent the apartment and then look for roommates for the other three bedrooms. You rent them out at a cost that overall pays for the entire apartment, or even makes a profit for you.

In New York, the opportunity and the problem are the same. Rents are super-high, so the chance to rent a private room for less than what your tenant would pay for their own studio or 1BR apartment would be attractive to potential tenants.

However, you must figure out a way to qualify to rent the apartment yourself. In New York, you typically need to show an annual income of 80 times the monthly rent to qualify for an apartment. This may be prohibitive for an apartment big enough to make money with house-hacking here, unless you go to the way-outer boros. (Just be sure you are near public transportation or this will be very tough to pull off.)

The thing to be careful about in New York is that the law here is very, very pro-tenant. If you are subletting the apartment to others, then you become their landlord. And this means that, if they don't pay the rent, you will have to sue them for eviction, and this is very difficult to achieve in New York. Courts are extremely friendly to tenants, give them numerous extensions, and bend over backwards to help them, so it's not uncommon to hear stories of tenants living for 6-12 months in an apartment without paying rent. You would still have to come up with the rent to pay your landlord.

So, if you were to do this here, you would need to be very strategic. You would need to find an apartment in an area attractive to young people, where the combined rent for 2 bedrooms individually could cover the rent for an entire 3 BR apartment. You would also have to be very strict about who you rent to, and make sure that they have sufficient income or resources to pay the rent, so you don't get stuck with a bad tenant situation.

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Is it possible to actually have your roommate paying most of your mortgage in an expensive city like NYC, via house hacking?

Background:

Sorry for all the thoughts/questions. I'm trying to work through what my plan will be. Thanks!

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Apologies if this is not the correct category. I'm extremely interested in purchasing real estate and renting out rooms for profit. I would ideally like to be a live in landlord (rent out the extra room or two), however, I'm also probably moving back to NYC soon.

I’m 27, no college debt, however, I may be starting law school or grad school in a few years as well. My thought process is that investing in real estate could help bring in extra money to increase my savings and help with grad school loan payments and providing long term cash flow in general.

For now, I’m exploring the idea of renting out my own property in Baltimore, while renting a room in NYC. I’m familiar with the area, I have family in Baltimore that could help me in managing the property, and if I purchase a condo or apartment, the amount of renovation and repair necessary would be minimal. However, my parents have a lot of experience with renovation and repair as home owners and they would be happy to help with that.

For example, I had my eye on a really nice 1 BR 99k condo in a pretty popular area in Baltimore. I could rent that out until it’s paid off and take some profit, as the average cost of renting in that area is more than the monthly payments might be, depending on the downpayment.

More details

My goal is to save up a down payment over the next 1-2 years, which is very doable, and then purchase my first property. Moving back to NYC, the game changes. Baltimore and DC have some pretty great programs to help first time property owners. Properties are also far less expensive, obviously. My research so far hasn’t shown any equivalent deals, on paper anyway, for NYC. There is a downpayment assistance program, but I’m not sure how much this would actually help me compared to the other deals.

More research is necessary.

Sorry for the long post. Does this sound like a good idea? Any advice?

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All Forum Posts by: Angelica Rose

Angelica Rose has started 4 posts and replied 6 times.

Post: Saving vs. Investing while living in NYC

Post: Advice on House Hacking in NYC ?

Post: How to get a loan for expensive NYC Apartment to "House Hack" ?

Post: Advice on House Hacking in NYC ?

Post: Advice on House Hacking in NYC ?

Post: Buying Condo/Apartment Out of State as First Property: Good Idea?