All Forum Posts by: Michele Z.

@Davido Davido - I would absolutely love to have a conversation about finding the people interested in this. I see that Grant kinda went dark when his idea wasn't getting across, and I'd love to be tagged in on any other discussions about this technique you might know of, here on BP.

We're currently searching for the right property and hope to be moving in by this July. Finding tenants will quickly follow.

I have question like, do you furnish the common areas, or allow the tenants to furnish it themselves; do you stock kitchens with equipment? If residents are managing in common is there still a property manager to handle maintenance requests? Are there unique insurance considerations, etc. I'd just love to read about how anyone is handling these situations. 

@Grant Shipman @Davido Davido - Just going through your posts, but are you basically talking about cohousing for renters? In a nutshell? Getting ready to do a house hack myself and a cohousing environment is one of the first things that came to mind. I've been interested in cohousing since the early 2000s, but it was never an option for me because I was a renter. To be able to bring that concept to others would  be amazing.

@Daniel Lehman - and your second point is exactly why I'm saving our VA loan for when we get to an expensive market, instead of using it not in a market where we easily qualify for other loan options. People really must not know this yet, because they scratch their heads at me whenever I give my reasons for waiting.

@Jaleel Phillips - thanks for your insights. We're currently looking for the best layout for this situation. Something that gives us a certain amount of privacy within this type of arrangement. So it sounds like you started with airb&b and switched over to longer term leases? Are you happier now?

Hey BPers,

We're moving into a market that doesn't really have Multi-family properties beyond the occasional 2+1 duplex which is an impossible arrangement for our family.  However, it is a market where there are a lot of students/working professionals/military/medical professionals coming in and out for short-term stints so...

We're considering doing a semi-luxury house hack with a 4 or 5 bedroom SFH. Ideally with a master suite on the main floor and other bedrooms upstairs. Most often this means you have at least 2 bedrooms sharing a bathroom.

I'd love to hear from people who have actually lived in this type of situation, where you managed it as short-term rentals or have year-long leases.I just want to get a feel for the pros & cons of your experience. What do you know now that you wish you knew before starting out? 

Did you mange it as a rental intentional community or a live-in AirB&B? Did you have problems getting people who were willing to share a bedroom? Are there any tips and tricks that you'd recommend?

Also, how did the transition work when you eventually left the house and started renting out all the bedrooms? We are only able to occupy this property for one year.

Thanks!

@Ashish Acharya

To be clear, I'm talking about renting out 3-4 bedrooms. Go big or go home.

And thank you, I found reference to an extended duty exclusion if you receive PCS order that take you more that 50 miles away, indefinitely - which would apply to us. 

What I'm still fuzzy on is the language referring to the 10 year period of suspension. Does that mean that after we qualified for the extended duty extension we'd then have to sell the property within 10 years of our PCS date to qualify for the capital gain exclusion?

Yes, I will run all this by a tax professional, just trying not to sound like a complete idiot when I speak to them.

I think I'll go learn about recapturing depreciation next.

@Ashish Acharya - You're correct, I have read about pro-rating expenses and depreciation - no problem there. But I've also found mention of Section 121 exclusions, which seem like they wouldn't apply in any way shape or form in our situation because we will only owner occupy for 1 year before we get military orders sending us elsewhere again. The implication of not being able to take advantage of Section 121 was that we would get killed in capital gains if we ever sold the house for a profit in the future?  But, at this point, I'm unclear on much beyond that sentence. I was hoping that someone could enlighten me a bit more about that.

Hi all,

Found a blog post addressing this from back in 2016, but not anything since the major tax code upheaval.

In a situation where we'll (husband, toddler & dog - military family) be somewhere for just one year, we were going to just purchase a house and then rent it out when we left, but the numbers aren't working. Rents are just a bit too low compared to purchase prices. I was thinking about renting a room out for extra money and realized tonight that if I just fully embrace house hacking it might make things easier.

Currently considering a 4+ bedroom house with a master suite on the first floor / or on a separate side of the house if it's a ranch plan, and we'll rent out all other bedrooms. I figure I can do anything for just a year, and we do have experience with another adult living with us - as that's pretty normal here in NYC.

5% on a house this size is just under to the 20% I was considering for a smaller home. If I do this right, I'd hope to find a house where I can for a little equity to make up for that lower down payment, or we could overpay the mortgage to get our equity up. Most importantly, we'd have a little extra capital available to buy a separate investment property to flip or BRRRR as well.

But I'm wondering if the 1 year residence will trip us up. Can anyone advise, theoretically? Just point me in the right direction to research. If we do this we will review things with our tax person but we just haven't found that person yet.

We would live there 1 year, and then just rent the master suite to someone else when we leave. What's going to potentially trip me up?

Thanks!

Thanks for the tips, @Cassidy Burns!  We already share our space with someone up here in NYC, so it won't be completely new. Plus we'd be looking for a situation where we can live on the ground floor and rent rooms that are upstairs to create some space.  The market we're talking about right now is not flush with MFHs so we have to be creative.  Definitely thinking of it as a dry run in case we get sent up to DC next. Appreciate the insight.

@Cassidy Burns - hello again! I'm curious how the house hack part worked out for you, where'd you find the renters, what were your qualification standards (assuming more than just $$ since you were/are living with them), do you act like a fellow renter or do they know you own it? That kind of thing. We're considering doing something similar down in Augusta as a dry run for the DC area, but we also have a kid so I'm not sure how that will work.