The “Luxury House Hack” brief four year update

[Christopher Davis]

In September of 2017 we purchased the book, by Ben Leybovich. Later that September, his wife, Patrisha, found us a house that checked most, if not all of the boxes needed for us to get started.

I made this post over four years ago describing the initial process and setup.

So how has the LHH held up? Quite well I’m happy to report. The goals were rather modest at the time; my wife and I aimed for the hack to cover maybe half of our mortgage before expenses and anything over that would be gravy. There are reasons for this humble target that I won’t go into now.

This target was consistently hit earning us anywhere from $500 to $1100 per month the first year. The initial mortgage was $1655 and 1.5 years later was refinanced to capture a lower rate and drop the mortgage insurance bringing the payment down to $1313. We have been able to nudge our rates up from an initial $46/night to the current $120/night. We prefer the higher rate and a slightly lower occupancy rate to a lower rate at near-full occupancy.

At present it’s a rare month that does not cover the full mortgage including expenses making it a true, full-on “house hack.” We’ve had months that have doubled our monthly note and it normally takes about 10 days of occupancy for the house to "pay" for itself.

The purchase price in September 2017 was $260k and the latest estimate of value was $470k. Considering the fact that we had been renting prior to the hack, that the process is working exactly as advocated and the market has had such growth, it is a non-trivial ROI and we're very grateful to have followed Ben's advice. I doubt that we would have found a better place to put our money to work more effectively.