Single parent, two kids. I live in a HCOL real-estate area, living in a 1BR apartment for the last 3 years. It's ok, but kids are getting older and I would like more space for them and me! A 2BR apartment or 2 bedrooms in a 3-4BR house with roommates would be great (garage, backyard, garden would be a bonus).
How to do this in the most Mustachian way?
My 1BR apartment is $1,600 per month, 2BR apartments are $2k/mo, 3BR houses are $3k/mo. I live 3mi from work and kids' school, bike ocassionally or drive ($0.75 per roundtrip). There are more affordable rents 45min north or south, but this adds commute time/expense, removes kids and I from local community where we have good child care support from friends. This does not seem like a good trade.
Thought about house hacking. A 3BR house here is $800k minimum and would return $1k/mo rent per room or $3k monthly rent. Using the 1% rule a good rental property investment should return 1% of purchase price in monthly rent: $800k x 1% = $8k per month. Not happening in this area! I'm considering real estate investment in other markets where the 1% rule is possible and properties cash flow.
Idea 1: keep renting the 1BR, save up a down payment, invest in real estate that cashflows in a better market to fund a 2BR apartment rental or 3BR house rental with roommates.
Idea 2: find a new job that pays more so I can afford the 2BR apartment
Idea 3: find a partner and move into a 2BR apartment or 3-4BR house with roommates, partner contributes some of the rent (obviously not the primary reason to find a partner, but it is a benefit!)
Other ideas?
Would love your insight and assistance.
Thanks,
Habilis