House Hacking: Live Free While Building Real Estate Wealth
Discover how to reduce or eliminate housing costs while building equity and gaining landlord experience.
House hacking is an investment strategy where you live in a property while renting out other portions to offset or eliminate your housing expenses.
Common house hacking strategies:
1. Multifamily: Buy a duplex, triplex, or fourplex - live in one unit, rent the others 2. Single-family with roommates: Rent out extra bedrooms 3. ADU rental: Live in main house, rent accessory dwelling unit 4. Short-term rental: Rent rooms on Airbnb while you're away
Benefits: - Qualify for owner-occupied financing (lower rates, smaller down payment) - Reduced or eliminated housing costs - Build equity while living in the property - Gain landlord experience with less risk - Potential tax benefits
Example scenario: - Purchase a duplex for $400,000 with 3.5% down (FHA loan) - Your unit: $1,800/month equivalent - Rental unit income: $1,800/month - Mortgage payment: $2,400/month - Net housing cost: $600/month (vs. $1,800 renting elsewhere) - Annual savings: $14,400
House hacking is often the best entry point for new real estate investors, offering valuable experience while building wealth with minimal financial strain.