Quote from @Kegan Scholl:
-22 years old
-$50,000 pre tax income from business this year
-80k in savings
-30k in investments
-pre approved for $350,000 (had to use parents as co-signers because I started business 2 years ago and didn’t make much first year)
Looking to get into first house by house hacking a 4 bed 2 bath renting out 3 rooms. Preferably stay for one year and find another house. Ideally want to break even or cash flow with the 3 tenants.
Now question is this: I was wanting to buy in Tampa, FL. I’m told taxes and insurance is lot and will rise each year and cash flow is hard to come by. So is there better markets to buy in (in big cities)? Or can I find something in Tampa? I’ve been interested in TX, AZ, UT, NC or anywhere in FL.
Also any advice for me is appreciated (save up more, focus on business instead, etc)
Any more info you need comment below! Thanks for advice.
I started with two house-hacks in Utah actually then moved here to the Tampa Bay market and continued house-hacking. I've helped dozens of people house-hack here. All those states' metros are going to have a relatively tough time "cash flowing" with minimum down and standard LTR. Without adding creativity like: room by room renting/padsplit, value add/larger cash down, mid-term or short term renting, etc it's just how things are.
I love house-hacking for Tampa Bay for a few main reasons: 1) great long-term outlook on appreciation; fundamentally strong market and growth projections, 2) diverse opportunities of house-hacks from luxury house hacks, cheap house hacks, room by room, STR, MTR, etc. You can really pick where you want to be on the "comfortability to profitability" scale here where I felt like those options in most markets were limited. 3) it's a great place to live all-around. The lifestyle, weather, etc are perfect for me and I'm so grateful to be living here!
As for insurance and all that, most of what you're hearing is media noise and really not accurate/blown out of proportion. The state has always had many hurricanes and while insurance here is higher than the national average, our housing price to amenities ratio is one of the highest around. The myth that you "can't get insurance" is absolutely wild. I've never had a client not be able to get a great competitive premium on a property here and we've bought all kinds of property. Property tax isn't cheap but it's not like TX high and Illinois and NJ etc. Utah has some of the cheapest tax and insurance rates, but their rent to price ratio is horrible and rents don't keep up with housing increases like they do here. We also don't have state-income tax, so the more you make the better the benefit of living here is.
Kudos you've saved and put yourself in a good position to start out on the right foot by house-hacking. 5 years ago my wife and I bought our first and now we have 9 units and have really scaled our passive income stream through those rentals. STRs specifically have supercharged our passive income goals and cut down our initial goal of a 10 yr run to get where we want to be in half. I personally house-hack still with a guest house on my property that I short-term rent and I highly recommend it. You can even "pay yourself" the cleaning fee if you want to and do the turnovers yourself. Not a bad side hustle - spending a few hours mostly doing some laundry and cleaning up and paying yourself a few hundred a month to do it! We don't do that anymore of course but it's something I did early on when it was worth the time!
