House Hacking

[Sherri Somers]

I have been reading a lot of post on house hacking and I have a few questions. I live in and own a single family home. If I purchase a duplex, do I have to move out and rent out the house I am living in now and move in the duplex to get the benefits? If this is the case when the one year is up then what. Its good for a year but to stay in pass a year with a family and a business could be complicate with lack of space since I cannot  return to my pervious home. 

[Christian Bors]

House hacking is the idea of moving into a single family house and getting roommates to help pay the mortgage or purchasing a small multi (1-4units) where you move into 1 unit and rent the others.  This is a great idea because you can take advantage of owner occupied loans (small down payment usually 3-5%) instead of using an investor loan that will require 20-25%.  Another added benefit is you get the experience of being a landlord, and you will basically be living for free or having a small monthly payment since the other units will be rented out.  

To answer your question, no you do not have to move out and rent your current house. However, you won't be able to house hack and a lender will require 20-25% down payment. If you decide to move into the duplex you would have to live in the property for at least a year. But your down payment will be small. After that year, the plan would be to purchase another SFH or house hack again at another property.