House Hacking: How I Have Money for Traveling and Craft Beer

And who doesn't want to travel and drink craft beer?

If you surf the BP forums regularly you have probably seen the phrase "House Hack" at least once. I myself stumbled across the buzzword and learned that I had unknowingly been implementing it's basic premise for years. House Hacking is a lesser discussed strategy of Real Estate Investing on this site (although it's growing). It is a strategy that can create an effortless seam between the average home owner and experienced Real Estate Investor. House Hacking provides relief from the burden of covering 100% of your housing expense and is the strategy that has afforded me the ability to travel and.... okay.... buy my fiancé craft beer. Cause that's more his thing. 

Either way, the extra money I have been able to pocket at the end of the month for whatever I choose to use it for has made a House Hack enthusiast out of me.    

So what exactly is House Hacking? 

First, let me just say that I can't yet claim to be an expert in anything Real Estate Investment related so I'll refer to Brandon Turner who has written a great article on the topic https://www.biggerpockets.com/renewsblog/2013/11/0...

but just as a reference for this post, I loosely define house hacking as: 

Minimizing or eliminating (aka offsetting) your housing expenses by renting out a portion of your home. 

And if I were to explain this in a few simple steps, to House Hack, you would: 

1.) Purchase a property (SFH, Duplex, Triplex, Fourplex)

2.) Rent out a portion of this property (the other 3, 2, 1 units, a room..... a couch?) 

3.) Use those rents to pay all or part of what remains as your portion of the mortgage. 

Awesome right? 

I tend to think so.  

If done correctly, I should preface. And in this post I'm sad to say that I don't have a house hacker analysis tool or the "10 steps to become a house hacker" or anything of greater value other than my own short story on the topic. So, like mentioned previously, I have been a House Hacker for quite some time. I own a few duplexes in Fresno, Ca., one of which I currently occupy. And for a short time while living in Los Angeles I was on the other side of the ploy. I myself, already an owner of two duplexes and using profits from those units to pay ghastly LA rent, was House Hacked. I rented from a guy who owned a SFH with a duplex on the same lot and I have to say I chose to rent from this person mainly because I respected his game. In the very near future I am moving back to LA and through what I imagine will be much sweat and many tears I will be attempting another House Hack. Wish me luck.  

But back to the topic. 

In the past month I have thoroughly enjoyed reading the House Hacking forum posts and have even given some of my own input. Because of the experiences I've been able to have using the simple strategy of House Hacking I'm not sure if I will ever be willing to pay the full bill on a house ever again.

In the past 5 years, by being mortgage/rent free, I have been able to turn the saved money into my travel budget. Some of the places I've been able to travel to: Zihuatanejo Mexico, Lima; Machu Piccu and was able to see the floating islands in Peru; Japan, the Philippines; the Bahamas and many trips around the US including my favorites of Miami, Chicago, Boston, Portland and Seattle and can't forget a few cruises as well. Traveling is a huge passion of mine but I would say it still stands second to my passion for Real Estate and more specifically my passion for this concept of House Hacking. There's something about living in a place that someone is helping you pay off but that you can still call your own.  

I have definitely had nothing short of a blast these past years. I was able to complete most of my early 30's bucket list. That is, until on one of my trips to San Antonio last year I found out that I was pregnant. My baby girl (cutest baby on the planet by the way) is now 4 months old. So now you can say that my travel budget has been tragically converted into a Pampers budget. Which brings me to some concerns I have heard regarding House Hacking with a family. For me, so far, House Hacking with my small family hasn't been a problem. My tenants next door are a young family as well. One of the perks to House Hacking is the ability to carefully choose who your neighbors will be. However, I do see the lifestyle of House Hacking being one that may be more palatable in your youth. 

I wouldn't say it's for everyone or for any age or for any family size (although for me, "once you go hack, you never go back"). But what I would say is, if you're young(ish) and you have only lesser responsibilities for now or heck... even if you're not the youngest but you don't mind some close by tenants and paying a low or NO mortgage, then WHY NOT? People have become accustomed to throwing their arms up and shelling out a huge portion of their income for those 4 walls. For me, I'd rather find another way. I'd rather sacrifice a few comforts in order to share the cost with someone else. I'd rather others help me pay down my assets and at the same time help fund mine and my fiancés travel and beer... and Pamper budget. I'd rather House Hack.