real estate investing house hacking | Why The House Hack?

What Is House Hacking?

House hacking is how I got started as a real estate investor waaaayyyyyy back in 2015 haha. I love this strategy because it is the easiest method to start, the easiest to avoid analysis paralysis with, and also one of the most lucrative strategies (if done correctly).

House Hacking Defined

House hacking is defined (my definition) as: purchasing a property with the intent to rent rooms/units to tenants in order to cover a portion, or all, of your mortgage payment.

I first house hacked a duplex in Missouri. I had been paying around $500/month to rent a two-bedroom, one-bathroom apartment for a couple of years. When I purchased my duplex the principal, interest, taxes, and insurance (PITI) were only $615/month. Both sides of this duplex were two-bedroom, one-bathroom units, and slightly larger than the apartment I had been living in. It even had a storage shed for each unit!

Now the fun part…I rent the other unit for $500/month!

This means I had gone from paying $500/month to live in an apartment; to effectively paying $115/month to OWN a duplex, with more space, and additional storage!

House Hacking Strategies

There are many house hacking strategies out there, and ultimately anyway you can earn money with your residence works!

Duplex, Triplex, Four-plex

This is the most common method of house hacking. The reason is that it is simple to do, and an easier transition for most. A lot of people don’t like the idea of having roommates or other people living in their unit. For that reason, a duplex, triplex, or four-plex (we will use the word “plex” going forward) is much easier to adjust to. This is no different than living in an apartment with neighbors sharing the wall…except you own the asset.

When you house hack a plex it is fairly easy to self-manage the property if you should choose. The biggest downside is that your neighbors will know you own the building and may try to get away with some things because they know you. This can be a little uncomfortable. I personally prefer to use a property manager and not let the other tenants know I own the building. That way I can still keep an eye on the building, but don’t have to be the “bad guy” haha.

Another great thing about the plex house hack is that it is super easy to rent your unit out if/when you move out of the property. With this additional income, the property will cash flow even more, and you can move on to house hacking another property!

This was the first house hack strategies I ever used, and the first real estate purchase I ever made. The beautiful thing about this strategy is that you could STILL rent bedrooms out of your unit to a roommate, or on Airbnb if you wanted to!

Real Estate Investing Course: https://military-millionaire-academy.teachable.com/p/from-zero-to-one-real-estate-investing-101
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My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase "I don't get paid enough" entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom!
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