All Forum Posts by: Ying Jia

@Ying Jia

Unless this is a B+/A property and area; I would keep the washer and dryer in the basement. Less of a chance of it overflowing when nobody is home. If this is in a B+/A property and area; I would figure out the cost of installing the washer/dryer; figure out how much more you can charge per month and if I got my investment back in 24-36 months; I would do it.

Let this drive your decision: what would be the ROI of adding a 2nd floor W/D? What would it be to upgrade the existing ones? If you're not in a high-rental price market, adding the 2nd floor W/D will most likely not get you much in the way of a return. The rent is driven by "market price" - what other properties that are similar to yours are renting for and what the rent price demand is in the market. I've known clients who have added W/D to a unit - and it wasn't the win they had hoped for. Prospective tenants weren't willing to pay more to have it. Some actually prefer (can't imagine this!) going to the laundrymat where they could command multiple washers and dryers to get done faster. And, I guess laundrymats are coming with a whole lot of amenities these days like beer, games, videos...who knew. Upgrading isn't recommended unless your existing units are at end of life or requiring a lot of maintenance. I do think it's great that you have a W/D on site for tenants. Before you make a change, look at your competitor's properties. You may find that cosmetic upgrades are the best return. Hope this helps...

@Ying Jia "house hacking around Fairfield, CT area, 500k budget" - With positive cash-flow when you move out?... seems unlikely but would love to be proved wrong! 

I agree with @Anthony Nunez because positive cash-flow after expenses is real safety. Planning or hoping for appreciation is risk. If you're not living in the property most lenders require 25% down. It's a little adjustment to consider when running numbers. 

As someone who didn't take the opportunity to househack, I would suggest doing so if it fits your lifestyle. If you have a family (ie a spouse that isn't thrilled with the idea) or you're the type of person that doesn't want to deal with people under your feet all the time, then it's probably not a good idea.  But the idea that you could buy a place with little money down, save money by having tenants pay your mortgage and then potentially repeat the process in a few years is very enticing.  

Good luck!

 Playing the appreciation side is a risky move in my opinion, especially when you could be buying at the top of the market in some metros (potentially). What if those markets have a 10%+ correction? Then you are negative equity with negative cash flow and this is not an impossible scenario. 

I would take the cash flowing property because no matter what happens to the market, you can pay the mortgage and put money your pocket.

More information would be needed I believe... For instance, where are you living right now? Are you renting? I think it is always best to take advantage of the fact that you can get a house you are going to live in very easily, and for cheap. It sounds like Choice #2 would be a place where you could buy with an FHA loan and live there for a year? I would do that, that would allow you to save more money by only putting down 3.5% so that you can have a bigger deposit to buy a third property soon.

Personally, I would take guaranteed cash-flow over possible appreciation.