Most people’s dream homes are not small, multi-family properties sharing a wall with your neighbors-though it could be the dream of those in rapid pursuit of financial independence. In this scenario, you are not sharing any indoor living spaces with your tenants, just the outdoor areas. The idea is that you purchase a duplex, triplex, or quadplex, live in one unit, and rent out the other units such that the rent from the other units covers your mortgage. This strategy is great for couples and small families who enjoy their own space. The original and most common type of house hack is the traditional (hence the name). It is, however, infinitely better than not renting it out at all. While it is very easy, and your current lifestyle will not change much, it is also unlikely that you will reap the highest financial reward for this. This is known as the “most comfortable” strategy, and unfortunately, comfort is not free. You live in the luxurious house you have always wanted and rent out the space you seldom use.īecause the spaces are separate, you do not have to worry about the misuse of appliances or the destruction of your home, and you know the place will be cleaned thoroughly after every guest. With a luxury house hack, you purchase a single-family home that has a guest house, mother in-law suite, or separate-entrance basement. This strategy is best for folks who really value their space, have a family, or do not want to trade money for comfort. Thanks to the emergence of Airbnb ($40 off your 1st stay!) and other home-sharing sites, the luxury house hacking strategy is the newest kid on the block. House hacking does not discriminate, and there is a strategy out there for everyone.Įarn More Money Different Types of House Hacking The idea of house hacking always seems to scare away families or people who really enjoy their space.ĭon’t worry! Before you dismiss the idea altogether, I suggest that there is a way for all demographics to house hack, regardless of whether you are a bachelor(ette) or married with kids. You may have heard of this strategy before and decided that it wasn’t for you. The rent from your tenants covers (or almost covers) your mortgage, and you live for free. House hacking is real estate investing strategy with which you purchase a one-to-four-unit property with a low-percentage-down loan (3-5%), live in one part, and rent the other parts out.
Before we do all that, though, let’s answer the question: “What is this house hacking thing, anyway?” In this blog post, I will share my story, go over the different types of house hacking, and the best kind of house hacking for you.
With house hacking, that 34% could be money back in your pocket, to save or invest however you’d like. Housing alone makes up 34% of the average American’s expenses, according to the Bureau of Labor Statistics.
Through this strategy, you will learn how to reduce or likely even eliminate one of your largest expenses. The Physician on FIRE-for giving me the opportunity to share the idea of house hacking with all of you. I’d like to say I bonded over beers with a man wise beyond his years.Īllow Craig Curelop to share with you his thorough house hacking guide today.īefore we get into this, I need to thank the man, the myth, the legend-A.K.A. I first met Craig at Fincon in Orlando in 2018 when he took me up on the offer of a ride to Whole Foods to pick up some craft beer to share at a gathering that evening. If you are intrigued by the strategies he outlines in this article, be sure to grab a copy of his book that offers much more detail, The House Hacking Strategy. His book release coincides with the publication of this post. Our mutual friend Scott Trench, author of Set for Life, CEO of Bigger Pockets, and Craig’s boss, also employed this strategy to become financially independent in his twenties.Īs of today, Craig is also a published author.
I saved money on rent by having roommates throughout my eight years at the University of Minnesota, but it never occurred to me that I could actually live for free and possibly make money while doing so.Ĭraig Curelop is a young man who has reached financial independence in just a few years with a few clever house hacks that he’ll detail below. If I knew then what I know now about the strategy, I would have been more inclined to implement a house hack as a college student, medical student, or resident. House hacking as a concept is not exactly new, but the term is relatively new to me.