House Hacking

Have you ever lived with a roommate? Maybe owned a duplex, triplex, 4plex, or other multi-family building and lived in one unit and rented the other? If you have or you know someone who has, that is considered house hacking. The basics of house hacking is, you own a property and you utilize other individuals incomes to help pay for the mortgage and upkeep.

Sam and I have house hacked for years by having roommates. This is super helpful in paying the mortgage on our house. However, it can be a little evasive. You are living in your most intimate area with other people. This did not bother us for years but as we are progressing in life, we are hoping to have some privacy. So, we are thinking of being done with having roommates and considering finding another way to house hack.

Other viable options for house hacking, would be to buy a plex of some sort, rent out the other unit or units and live in one. Depending on the price and amount of units we get, will depend on how much money we will need to pay for a place to live. The deals we have looked around Eau Claire for, if we did a duplex, we would most likely get around $1,100-$1,300 in rent for a $275,000-$300,000 property. This would mean, we would need to pay around $300-$500 a month to cover mortgage, insurance, and tax, then our utilities. We also, looked at some 4 plexes around the $500,000-$600,000 mark, with similar rents. I believe with renting 3 units and living in one, we would make around $300 a month and have our mortgage, taxes, insurance, and utilities covered. That would be pretty cheap living right there.

There are other things to consider when owning a house or multi-family dwelling other than mortgage, insurance, taxes, and utilities. You should also be saving for capital expenditures and maintenance because they tend to happen at the most inopportune times. As I am writing this, I had 2 furnaces at 2 different properties go out this week. One we got replaced today and the other we got the quote today to hopefully have replaced in the next couple weeks. It is working enough to get by, we did a band aid repair one month ago and it is starting to fail again, so, we will get it replaced in the next couple weeks before it completely goes out.

This is a talk about house hacking though, not maintenance and capital expenditures. If you are living on a tight budget, you want to live on a tighter budget, or you want to have excess cash, I would consider house hacking. The quality of some duplexes in Eau Claire, if you wanted a single family style, you would be spending a similar amount for the single family as you would for the duplex. However, one option is going to pay most of your mortgage and the other option, you are going to have to pay for it all, unless you get roommates.

I am a massive proponent for house hacking and I hope we decide to continue house hacking by utilizing multi-family units.

If you like this topic or are interested in talking more on it, please comment or message me.

Your Life Tutor

-Shaun Tutor


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