Can you really househack every year?

Question

I hear a lot of people say something like "just buy a duplex every year" when it comes to househacking but is that actually possible?

This is hearsay but I heard a story about someone saying they tried to buy a 2nd househack after their first one but they couldn't because they needed "20% equity" in their first home.

Is this an actual concern or is it just not true. And if it is a problem that you are most likely to face why haven't more people talked about it?

Bill B. · Answer

You need to find a lender that will count your rental income (easier after 2 years of tax returns.). I convinced my wife to move to 4 new SFR’s 4 years in a row turning the previous primary in to a rental. If you can pull off just that you will probably be in a better financial position come retirement time than 90% of Americans. And if you only do it every 3 years or even 5 years you still win.

Realistically for me the big deal was saving about a full percentage point on the new loans. That means a couple hundred dollar lower payment  on a $300k property. $70k in interest over 30 years. And the years and years of rent increases.

David M. · Answer

@Alec Jacobs Its a nice idea, but yes you still need the capital, for one, somehow to keep purchasing since its next to impossible, other than USDA or VA loans, to get 100% financing.

Crystal Smith · Answer

Much depends on your personal financials.  If you're going to constantly rely on low to no nothing down financing then the answer is no- it's not possible. if you're able to purchase using conventional loans and you qualify from a DTI standpoint, then yes it is possible. Especially if you're married. We have had a number of married couples who have purchased a  multifamily to househack using one person's credit and income.  Then the following year they use the next person's credit and income to qualify for a 2nd property. They will eventually have to go conventional and come up w/ 20% down to keep the year to year thing going.

Travis Timmons · Answer

Like everything else - easier said than done. A lender that has a grasp on your financial picture will be the best to tell you how and when you are ready for the next one.

Don't get lost in the details...the principle holds regardless of how often you move on to the next property. If it is once every 3-5 years, it's still amazing. Keep your head down, live below your means, delay gratification, and get that snowball rolling downhill.

Noah Bacon · Answer

Hey Alec! Buying a duplex every year is certainly a high bar to set, not to say it can't be done. I have not heard of qualifying for a loan based on the amount of equity in a different property. I purchased 2 SFHs back to back years, and my biggest hurdle was proving a low DTI with a mortgage on my tax return. Maybe I am misunderstanding the question, but I would talk to your lender and see how much of your mortgage you are able to offset with your rental income to position you for another loan.