Can’t Afford to Buy in the Bay Area? Try This Strategy (House Hacking)

The biggest reason why people are renting instead of buying is because their mortgage would be two or three times higher than what they are paying for rent.

But here is how to buy a home and keep your monthly payment low. It’s called house hacking. It’s when you buy a multi-family property, live in one unit, and rent the other units out.

Taking this property in Alameda as an example, 2135 Buena Vista Ave:

It's a triplex (has three units): one unit is vacant (for the future owner to occupy), and the other two units are tenant-occupied, which bring in $5,500.

The property costs $1,600,000
With 20% down, an interest rate 6%, the approximate monthly mortgage (including taxes and insurance) would be $9,300.

$9,300 - $5,500 = $3,800

So you are paying $3,800 while living in a 3 bed, 1 bath unit with your tenants who are helping you to buy this 1.6M home. Plus, the schools assigned for this home are Elementary - 8, Middle - 6, and High - 10.

The "problem" with this approach:
1. You will have less privacy (it's like living in a condo)
2. If you manage the tenants yourself, it can feel like a second job
3. If repairs arise, it will cost a lot (think about changing a roof for a huge house like this one)
4. Tenant laws - if you get a bad tenant, it's just a headache

However, if buying feels out of reach, this might be your way in.