All Forum Posts by: Jerad Graham

Quote from @Chris Seveney:

@Ray Hage

I agree as I would stay away from condos as between special assessments and increase of fees, what is the risk vs reward.

Many of these buildings are run by people who are not property managers or have development experience and lack the knowledge to properly run the property

Also many don’t realize that on older buildings your initial estimate will be 30-50% less once the work starts, especially on older concrete buildings that are susceptible to deterioration due to the weather in these areas (especially the salt)

I agree with you Chris. Risks are high and rewards are ok at best in FL at this time. The only positive to a condo is its low entry point. I feel especially bad for the older folks who are on a fixed income as they are getting slammed with 6 figure assessments. Any money made will be gone quickly! Google something like "Florida condo assessments" and you'll see a few news stories in the last few months

It's really about the lending. There are very special circumstances where a lender will count projected rents by the room. Otherwise, it is all about individual units.

Plus I would argue that the House Hacking Community is small. As a developer, you want to cast the widest net possible. Because it is a form of investing, it isn't like a HH will pay a huge premium because of it.

If you want to get creative, it might be interesting to see what is in your market and what tenants desire. For example, if you are in a heavy bike community, maybe installing bike racks somewhere might bring some character to the property and it doesn't cost a lot. If you are up in the mountains, somewhere to store snowboards. If you are in a college area, maybe having a study room/den could be interesting with the house pre wired for internet.

If you are really set on your buyer being a house hacker, another interesting option for house hacking is to have each room with their own locks, etc. That's what I did for my first house hack since I had roommates. The cost isn't much different and a buyer can go in and start renting out rooms immediately. 

We have a builder here in Utah that is building single family homes with fully separated basement ADUs. They come with fantastic insulation between the floors, extra parking on the side with a separate entrance, their own laundry, and plenty of bedrooms up & down. My favorite has 5 bedrooms up and 2-3 down. So the basement ADU brings in plenty of revenue to make the upstairs owners mortgage liability equal to that of a small townhome.

I think this will become much more common in areas where people are being priced out of the market. Lenders can use legal ADUs to help qualify for the mortgage, so people that didn't even want to house hack before, may be in the market to do so simply to afford the type of house they want. 

@Jerad Graham

House hacking properties should have features like a quadplex with 3-4 bedrooms, flexible layouts, private entrances, and amenities. Energy-efficient features, soundproofing, shared amenities, and local zoning compliance are crucial. Location is also important, as house hackers may seek properties near public transport, schools, and restaurants. FHA eligibility is also important for financing. The ultimate goal is to maximize income potential and tenant satisfaction.

Good luck!