House hacking?
Don’t worry, it’s not illegal. It’s just a super awesome way to help you reduce your expenses and build your wealth even faster! It’s also the strategy that I’ve been using to grow my real estate portfolio.
House hacking is when you purchase a single family home or a multifamily property and rent either the units or rooms out while you live there, covering all, or most, of your expenses. Meaning you live there for free or at least greatly reduce your housing expenses!
It’s something I’ve done personally with all three of the houses I’ve lived in. I’ve been fortunate in that my roommate has been willing to move to each one with me. He’s lived with me in all three houses and is always ready to move to the next. Overall, I have to say that it’s been a great experience. We get along and for the most part our work shifts are the opposites of each other so we don’t really see one another. That doesn’t mean we haven’t had our fair share of challenges though.
Okay, you’re giving me that look aren’t you? The “I’m an adult and don’t want to live with a roommate or two.” Trust me, I totally get it.
After living in the barracks for around three years with roommates I was dead set on getting my first house and just living alone and enjoying the privacy. That’s exactly what I did and let me tell you, that did not last long my friends. As soon as I realized the amount of money that I could save by having one, I was on a search for my a roommate.
Now, of course you have different priorities than I do. I’m on a quest to reach financial independence by 30, therefore I’m trying to build my wealth as quickly as possible and increase my savings rate. However, I totally understand if you want to keep working and continue doing other things with your life. Heck, it’s your life and you should enjoy it anyway you like, but I will say that the extra money you could save from house hacking may change your mind.
You could put the money towards a new car, paying down debt, taking a vacation. Your options are limitless!
Let’s say you have some debt you’d like to pay down. You’d like to just completely obliterate it because it’s soul crushing and you know once it’s gone, life is going to totally rock! You continue making those God awful minimum payments that are barely putting a ding in your debt. You decide to get a roommate in order to help out a little. They live with you for six months to a year, bringing in an additional $300-$600, or even more depending on the area you live in. And that’s just with one roommate. Imagine how much faster that debt would be out of your life if you had two or three roommates. You would absolutely crush it! Once that debt is knocked down and out of the way, you’re free!
I can tell you from personal experience, living debt free is one of the best feelings you can have and the sacrifices are definitely worth it in my opinion.
Still Not Interested???
Okay, okay, so you really don’t want roommates. Or maybe you’re married and have a kid or two and would like to keep your family’s privacy. No problem at all! You’ll still be able to house hack and here’s how..
House hacking isn’t only reserved for single family homes. Like I said above, you could also purchase a property like a duplex, triplex, or quadplex and have the other units cover your expenses.
By doing this you could keep your privacy and live alone, but also become a landlord by renting out the other units on your property and having your tenants cover the mortgage with their rent.
This may sound like a little more work and some extra sacrifices, but I’m going to tell you right now that it would be absolutely worth it in the long run. No matter what, if you’d like to pay off debt, or save more money, or just get into a better financial state, you’re going to have to put in the work and make sacrifices. There’s no way around it. (Unless you were born into a wealthy family. I’m sure you still have a fair share of problems though).
Maybe you’re starting to get on board now, huh?
I hope so!
House hacking is a great and easy way to get your feet wet in the real estate investing world and gain some experience at the same time. Who knows, you may just end up loving it AND crush some debts at the same time! Maybe even take a well deserved vacation while you’re at it as well!
It’s a pretty straight forward concept. Find some roommates and reduce your cost of living in order to save even more money, but it’s one of those that’s easy enough to avoid too. Purchasing your first house or multifamily property can be a scary venture, but it’ll all be worth it when you see the benefits it can create!
Are you currently house hacking or would like to know more about how you can get started? Just leave a comment or send me an email and I’d love to get back to you to hear more!
I tried this myself and I am doing pretty well. I have 2 tenants in the same house and they pay for everything.
Admittedly, it wasn’t too great in the beginning. That was all my fault though. I didn’t try hard enough to get the first tenant the first few months I lived there, and it showed since I wasn’t profiting as much as I should have. I learned my lesson the hard way and am now doing well.
This hack works, if you work, at least in the beginning.
Don’t be lazy! If you are going to do this hack, you make sure you hunt down tenants, soon and early. Do the work now so you can relax later!
Hey Angel! Thank you for the response! I’m so glad to hear that you’re taking on house hacking too and that it’s going so well. I definitely agree with you. If you want something then you’re going to have to work for it. Thanks again and take care!