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House Hacking During Residency

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  • House Hacking During Residency

    Anyone have any thoughts on house hacking and having two inexpensive rental properties by the end of residency. Leverage yourself with physician loans? I ran into an inheritance and had low 5 figures as emergency fund in case something went wrong. Any objection? 1 FHA loan with 3% down. 51 K mortgage. Now renting for 1200 k a month. ~700 dollars a month in costs. Also now living in a home that was bought with physicians mortgage. We will live here 2 years, update it with 20 k or so once I am an attending and rent it for 2.1 to 2.5 k a month. Costs will be 1.6 k a month. Why is everyone so opposed to buying in residency when we have these tools? I am going for PSLF so no need to worry about paying down large loans. I probably will house hack with my wife one more time prior to building our forever home. I know they will cut me out on mortgages eventually. Costs INCLUDE property management. Passive on my end except for the renovations that my wife and I did. Minor plumbing, hanging new lights, ceiling fans and painting. Now that I can moonlight I am paying others to do it as my time in the hospital is more valuable.

     

    Notably interest rates are favorable because I lived in each for a year prior to renting.

     

    Eddie

  • #2
    What you're doing isn't house hacking. It's just being a landlord. It's all good...until it's not. There's nothing wrong with being a landlord but residency is usually not a great time to do it. If you want real estate in your portfolio then there's nothing wrong with it. Most people are against buying a house in residency because there is a lot that can go wrong. Renting is a price ceiling and owning with your rent, etc. is a price floor.

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    • #3
      Seems like a headache, definitely not for Fatlittlepig, too complicated. You’re going to have plenty of money once you graduate and there’s no need to do this.

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      • #4
        If you're actually making the money on the places you say you are, then it's not a bad idea. However lots of people ignore various costs associated, tax, insurance, etc

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        • #5


          However lots of people ignore various costs associated, tax, insurance, etc
          Click to expand...


          Roof, Furnace, Other appliances, Washer, Fridge, etc., basement leak, pests, bad renters, lawn and landscape,...

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          • #6
            Your most difficult month in residency e.g. ICU rotation + burst pipe in rental house = pure unadulterated pain.

            Keep it simple.

            I would definitely advise against relatively complex machinations like this when you have student loans. PSLF is still shaky although I think ultimately trustworthy. I wouldn't use it as a strategy not to worry about loans I would consider it a good shot at a loan repayment strategy.

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            • #7
              One thing that is missing is spouses income and the ability to manage the property. Low 5’s is fine for living expenses, not for two properties. Inexpensive properties usually translate into irresponsible tenants.

              If your spouse can handle the “owner required emergencies” and has the financial funds available to pay for “unplanned repairs, she can run the properties without you. Absent that, two to three years is too short of time for low cost rentals.

              “I am going for PSLF so no need to worry about paying down large loans. “. Your intent may or may not pan out.
              You don’t both PSLF and two properties to determine where and what your employment decisions will be in the future. Life gets complicated, the less complicated the better. Better off focusing on getting your career off the ground.

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