This one hack built 33% of my wealth

Read time: 4 minutes

Last month, I was paid $57 to live in my house.

That’s not a typo, and I’ve actually been pulling it off for nearly 9 years.

It all comes down to how I chose my house and a little outside-the-box thinking, and it’s a lot easier than most people think.

Let me show you how.

In today’s issue:

• What is “house hacking”?

• How can you get started with this incredible wealth multiplier?

In 2015, I bought my first house.

It was a 2 bedroom, 1 bathroom house with dark red walls, plush green carpets in the bathroom, and window curtains covered with drawings of tiny Japanese samurai.

Clearly, a stunner. My wife and I were living the high life.

^{Check out all of that carpeted goodness. I’m sure it’s clean, right?}

But that house had a superpower…..

A second unit.

That basement unit, which had about as much natural light as a goblin’s lair, still allowed us to offset our entire mortgage with rental income.

Our largest monthly expense evaporated overnight.

What would your budget look like if you could cross out your entire rent or mortgage payment?

Let me tell you, it’s pretty nice. I would even say addicting.

A few years later, my wife and I found ourselves in a new city looking for a new house to buy.

And there was only one thing on my mind - I want another multifamily property.

We hunted for a while until we found a place that could bring in good rental income and one that we actually would enjoy living in, and put it under contract.

One day after closing, we hosted our first guests in our brand new AirBnb rental on the top floor.

A few weeks later I listed the garage parking spaces up for rent, and just like that, I was living for free again.

The concept I just demonstrated is known as house hacking.

House hacking is a term for when you use the house you live in to also bring in income.

Perhaps the most common way to do this is just the way I did - you buy a multi-unit building, rent out part of it, and offset your mortgage expenses with that rental income.

But people all over the world are finding tons of creative ways to turn their biggest expense into an asset. Here are just a few:

1. You could get an extra roommate. This works whether you rent or own.

2. You could rent out your basement for storage or as a separate living area.

3. You could buy a 2-4 unit property, live in one unit, and rent out the rest. (Staying under 4 units allows you to use a traditional mortgage instead of a more expensive commercial loan.)

4. You could rent out your garage.

5. You could rent out your parking spot.

6. You could downsize to a smaller place.

7. You could get a larger space, and rent out the extra bedrooms. (My sister did this in her single family home to also live for free.)

8. You could convert your attic into an AirBnb.

9. You could park an RV in your backyard and rent that out on AirBnb.

10. You could rent out your large backyard as a party/event space.

11. You could rent out your backyard to campers.

12. You could rent out your backyard to dog owners.

13. You could rent out your garden.

14. You could rent your house out as a filming location.

The options are limited only by your imagination, but the principle is the same:

Turning your #1 expense into an income-producing asset is a massive advantage when building wealth.

Is it slightly inconvenient to be a landlord?

Yes.

Is it a bit obnoxious hearing someone else’s 4-year old crying in the upstairs apartment during the day?

Also yes.

Is it worth it for $2000 per month?

Heck yes.

Nothing else we’ve done has had as large of an impact on our ability to save and invest as this one decision. 

Housing for most people is their largest expense every month. By wiping it out, that income is freed up to get to work for you.

For what amounts to a few weeks every 2 years hustling to fill a vacancy and turn an apartment over, and the occasional maintenance call, I’m shaving years off of my working career.

That sounds like a trade worth making.

Keep growing,

P.S. Want to learn more about house hacking? I recommend this article to get you started.  Make sure to do your homework before jumping into any deal, and have fun!

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