house hacking real estate

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Are you interested in house hacking real estate? As in, live in one part of your house, and rent out the other?

Awesome! That’s exactly what we do here at our two family house.

If you’re just starting to wrap your head around multi-family homeownership, you’ve come to the right place.

Is house hacking real estate right for you?

Begin by asking yourself these questions.


1. Do I want to own a house?  

Obvious question.  Many people love homeownership.  But it’s not for everybody.  

There are plenty of successful people out there who don’t care to own a home and are perfectly happy renting.  

If you’re one of those people… embrace it, pay your rent, and focus your limited time on the things that matter to you.  

If you’re not one of those people, and the itch to own a house won’t subside, keep reading!


2. Do I have the money smarts to own a house?

Homeownership costs a lot more than monthly mortgage + insurance payments.  

Depending on the condition of your house, you might need more money up front to fix it like hell.  You also will need money for repairs and regular maintenance.  

Are you disclipined with money?  Do you have the patience to sit down and (trigger word!) set a BUDGET for the things your house will need? 

Once you own a two family and have a renter, you’re essentially running a business, and need the money know-how to do so.  This might be for you, or it might not.  Only you can decide.  


3. Do I want extra income?  

Sassy question, I know.

This is one of the biggest perks of house hacking a duplex— rental income!

If you are looking for a (mostly) passive income stream, renting out a portion of your house is an excellent way to do so.  


4. Do I want to deal with tenants?  

Our mason’s brother has been a two family homeowner for twenty years – and at 50 years old, is a millionaire, and still house hacking. He said it plainly: “A two family’s great if you can stomach the tenants.”  

Our next door neighbor, who also house hacks in his 70s, echoed similar sentiment: “Real estate is good, as long as the renter pays.”

Any landlord will tell you, no renter is perfect, and yes, there are calls and texts about clogged drains, heat not working, late payments, etc.  

We personally don’t mind these things right now – the income outweighs the inconvenience – but there may come a time that we don’t want to deal with it any more.  

You might not yet know what level of tenant tolerance you want to take on. Sometimes experience is the only way to really know – but please, consider this question before you are up to your elbows in house hacking real estate!


5. Do I understand houses (enough)?  

By “understand houses” here, I mean: are you either (a) well-versed in maintaining a home (think gutters, snow shoveling, boiler cleaning, dryer vents), or are you (b) willing to learn?  

Even if you’re not the kind of person who will get in there on a toilet clog, are you willing to pick up the phone and pay for someone who will?


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    6. Am I willing to give up a certain level of privacy?

    This question depends on what type of house hack you take on.  

    Some people rent out extra bedrooms and share a kitchen and bathroom, while others have a separate apartment completely.  Some people even do short-term renters like with traveling nurses or Airbnb. 

    Either way, unless your rental unit is an entire separate structure, you must ask yourself: am I willing to give up a certain level of privacy?  

    You will see your renters at some point.  It might only be while taking out the trash, or you might share a backyard, or, or, or…  

    Think about this for a bit, please.  If you want a secluded white-picket-fence setup, house hacking real estate might not be for you.   Or, you might not mind so much, and get yourself some wonderful renters, and buy your tenants Christmas gifts every year.

    We have a few more thoughts on this in our post, “House hacking a duplex: pros and cons to make you think.”


    7. Am I cool with the neighborhood?

    Two family and multi-family homes often come in neighborhoods with… more two-family and multi-family homes.  Some areas are great and lovely, and some are… not great and lovely.  

    Why is this?  

    Side tangent: multi-family homes are often not occupied by their owners.  Single family homes are more often occupied by their owners.  It is not as common (not exactly rare, but not as common) for multi- and single- family homes to border each other.  Single fams usually hang together, and multi-fams usually hang together.  It’s just the way towns were developed, at least from what I know about the NJ/NY area.  Single fams often boast more “pride of homeownership” (no one cares for a house more than the person who owns it).  Multi-fam’s uninhabited by their owners tend to be a little less so. 

    Our neighborhood is mostly multi-families with some single families interspersed.  The benefits include nice walkability, proximity to public transit, and plentiful real estate to choose from.  The downsides include less parking, crowded driving, and stupid neighbors that like to set off fireworks at midnight when my baby has finally fallen asleep.  (It’s fine.  Everything is fine.). 

    Whatever sort of neighborhood you choose, you need to be confident in your assessment: am I okay living in this neighborhood?  What about my family?  Can I live with it for a little while to help achieve my financial goals?  

    house hacking real estate
    …what kind of neighborhood are you into?

    8. Is my spouse on board?

    Very, very important question here.  Perhaps the most important, for the old adage holds true: “Happy wife, happy life.”  (And vice versa! Equal opportunity happiness, here, folks).  

    You must, must be on the same page about house hacking with your spouse/partner.  You will be in the trenches together on this.  

    If you cannot honestly talk through these questions together, please don’t invest in a two-family house hack.  There are plenty of other ways to invest in real estate.  

    Your marriage is more important than a few bucks in rental income.  And so is your sanity, for that matter.  


    9. Who will help me?

    As with anything in life, it is helpful to know someone who has trod the road before you.  Speaking with a real live person about house hacking real estate can really help you clarify if it’s right for you.  

    Is there anyone in your life who has house hacked real estate before?  Can you call them and ask what it’s like?

    While we didn’t poll anyone personally about house hacking real estate, we found a great resource in Bigger Pockets. We encourage you to do the same, though as the podcast has grown over the years, perhaps check out Bigger Pockets Rookie if you’re just getting your feet wet.  Through a few BP meetups, we connected with investors near our area like our buddies at Famvestor.  It’s helpful to bounce ideas off one another and compare notes.  

    And, just in case this isn’t obvious… WE ARE HERE FOR YOU!  We will help you.  Email or message us, comment on a post, follow us on Pinterest or Instagram, and we will do our very best to help you out.  Seriously.  

    Check out our other posts about house hacking real estate, too:


    Conclusion

    Alright, fellow house hacker – that’s a wrap for today. Take your time with these questions, please – they are just a springboard for the mental and out-loud discussion that we hope you address.

    Are you considering house hacking real estate? What’s the most important question you have considered so far?


    house hacking real estate 9 questions to ask before you start