When is house hacking not worth the sacrifice in quality of life?
11 Replies
Susan Tan
Rental Property Investor from Houston, TX
posted about 2 months ago
House hacking is often considered here in this forum as a good beginner's move to getting started with the first rental property. When does house hacking & self-managing a property NO LONGER worth the time & effort as your net worth grows? I saw the horror movie Pacific Heights, in which a double-income child-less couple buys a multi-family & rent out the other units to horrifying results. This movie has scared me off of doing house hacking!
Lee Ripma
Rental Property Investor from Los Angeles, CA
replied about 2 months ago
Haha! I’ve never done it, I likely won’t ever do it. My reasoning is, sure do a house hack if you want to. But if that’s all you ever do, are you an RE investor? You’ll probably do lots of other deals if you’re really an RE investor so house hacking doesn’t need to be one of those deals. I’m pretty happy having the flexibility of renting and just keeping props as investments. Don’t have to be swayed by where I would live or what I’m looking for. I am NOT my target tenant. So don’t feel like house hacking is something you have to do!
Theresa Harris
replied about 2 months ago
I rented out a room in my condo while I was in grad school for a bit. I like my privacy so I can't see me doing it again. Having said that you can buy a duplex and live in half and rent the other half or buy a house with a self contained suite-usually a basement suite. Both allow you to get extra income, decrease your living costs and keep your privacy.
John Teachout
Rental Property Investor from Concord, GA
replied about 2 months ago
We house hack by having Airbnb spaces in our home. To me house hacking is an income generating process and isn't much different than having a job. Is it really worth getting up early every morning and driving to the factory or office? If it's such a pain, why do people do it? Because that's how they generate needed income. If house hacking, or the thought of it, is so bad that it's not worth it to you, then don't do it if you don't need to. Just like you can quit your job if you hate it. Like every other aspect of real estate investing, house hacking is just one model and not for everyone but is an achievable starting point for many.
Pat L.
Rental Property Investor from Upstate, NY
replied about 2 months ago
I did it for many years during my university days & then as a necessity as I accumulated seller financed properties during my early W-2 Job days.
I could write a book on the days nursing bloody knuckles, years of no vacations, junker cars that no date would be seen dead in, maxed out credit card frugality & the proverbial, mentally exhausting, room-mate trials & tribulations.
At the time many of my colleagues ridiculed my dumb perseverance & were convinced I'd go broke. One even defaced my "in-house room for rent postings" with 'beware slum landlord'. When I retired "way too early" they told me I'd be back begging for my JOB. That never happened, in fact we were free & clear & debt free at an early age. However, they all worked into their mid to late 60's accepting the fate of menial PT retirement jobs to stave off boredom & to supplement their retirement/pension incomes.
I must admit it's a sacrifice that a few of us fools decide to embark on !!!
Filipe Pereira
Property Manager from Windsor Locks, CT
replied about 2 months ago
@Susan Tan , it's no longer worth it when it affects your enjoyment of your own home. I purchased a 4 bedroom house in CT in September of 2017 and moved in shortly there after. I also moved in a couple of guys my age. Since then, I have never paid the mortgage out of my own pocket and have put a few hundred bucks a month into my pocket during that time as well.
Have the numbers been fantastic? Yes, absolutely. Has it worn me down mentally in some areas? Yes, absolutely. My girlfriend and I are now done with it, and we are phasing our way out because we're ready to call home, home. In our case we share common areas with our housemates, and it's really just becoming too much of an inconvenience. We want more peace and quiet, and while our current housemate is pretty quiet, there is nothing like just having a house to yourself.
Obviously this would be a bit different if we lived in a duplex, triplex, etc, but eventually we would still want our own place. It's worth mentioning that when I started having housemates it was out of necessity. I had just quit my job to start my property management company, and I was concerned about an additional mortgage. Now that I have been in business for a few years and things are much more stable, I'm comfortable making the leap to paying the mortgage myself.
Mark Cruse
Investor from Fort Washington, MD
replied about 2 months ago
For me it would never be worth it. Possibly when I was very young I could have with people I knew (maybe). I did rent apartments with room mates back then so that may have worked. Other than that, I would have to find out another way to invest. Just not a good fit for me. In terms of PM, if done correctly for only a handful of units it´s ok. If you go beyond that itś like a regular job and if thereś not decent compensation what is the point?
Claudio Salvatorelli
from San Diego, CA
replied about 2 months ago
I agree with most of the comments In here... House hacking is fun when having your own privacy ideal situation will be a multifamily property like a duplex or triplex preferably.
Larry Turowski
Flipper/Rehabber from Rochester, NY
replied about 2 months ago
@Susan Tan Your question was in regards to net worth, not personal feelings about it, so I’ll leave that part out.
With regards to net worth, It is no longer being worth doing anything when it keeps you from doing something more valuable with your time.
I can imagine house hacking being such a distraction and annoyance that it could easily keep you from earning an extra $1k or $2k per month. I never house hacked but I should have when I was younger. But once I had one or two other properties and a family and bigger goals I would have dropped it.
For personally managing—I still personally manage—that’s when again it becomes too much of a time sink or an improbability. For me I can outsource most tasks while still self managing. It becomes an improbability when I buy bigger apartment building or out of state.
Steve K.
Real Estate Agent from Boulder, CO
replied about 2 months ago
@Susan Tan When your best friends move out, and some random new people move in. It goes well for awhile but turnover is high. You get tired of finding new roommates, forming new relationships and getting to know people, so you stop putting as much effort in. Then you let a hippie kid move in who seems cool enough, but later informs you that he’s a legal peyote church priest, and starts growing peyote in his closet. He hosts all-night peyote bonfire bongo ceremonies in the backyard. This irks all the nice old people living on the quiet cul-de-sac, as well as the fire department and the cops. He claims his status as a peyote priest makes him a protected class. He has all the papers. Then he falls off the wagon and starts drinking a bottle of tequila for breakfast, and tries to stab your other roommate who is just trying to use the bathroom they share, because he thinks the other roommate is some kind of demon. So you tie him up and call the cops, then change the locks and move his stuff out to the curb while he’s in jail. Then you replace him with the most boring person you can find. Eventually your girlfriend wants to move in, and you let her (more the merrier!). But she’s a vegetarian and the boring roommate microwaves frozen fish for dinner every night. He buys it in bulk from the expired frozen fish store, and the place reeks. So the girlfriend quickly convinces you to buy a new place that is much less fishy, and the two of you move out. Then you make babies and need more bedrooms for kids and gramma’s and aunties and nanny’s instead of roommates. That’s how it went for me anyway. I lasted 5 years house-hacking in my mid twenties. At first it was a group of close friends and that was tons of fun, even though we had 8 people and 5 furry creatures living in a 4/3, all sharing a single tiny kitchen. We made it work because we were pals in our 20’s, just excited to be living in Boulder with cheap rent. But as time wore on and friends were replaced with whoever, it became less fun. There was also a lame paralegal who tried to screw me over. She stopped paying rent and tried to blackmail me by threatening to file a report with the county for bogus health and safety violations. I had to call the lawyer she worked for and arrange a mutual rescission, but never recovered the lost rent. Lots of good war stories once it became a revolving door of transitional folks, turning over every several months. Great way to get started though, and I’d do it all over again in a heartbeat. The savings from not paying rent or a mortgage, plus five years of principle pay down and appreciation, was truly life-changing. A small 3.5% down payment on that first house hack is what built the initial seed capital which lead to a few live-in flips and eventually investing in small multifamilies. It was also a great way to learn about how (and how not) to manage a property. I’ll definitely never rent to a peyote priest or a paralegal ever again (sorry peyote priests and paralegals, I’m sure many of you are good people but I’m not taking any chances).
Susan Tan
Rental Property Investor from Houston, TX
replied about 2 months ago
@Steve K. You win for the best reply on this thread.
Juan Pardo
replied about 2 months ago
Originally posted by @Susan Tan :House hacking is often considered here in this forum as a good beginner's move to getting started with the first rental property. When does house hacking & self-managing a property NO LONGER worth the time & effort as your net worth grows? I saw the horror movie Pacific Heights, in which a double-income child-less couple buys a multi-family & rent out the other units to horrifying results. This movie has scared me off of doing house hacking!
That's a really good movie. I think reality could be even worse so, no, I do not think househacking is worth it.
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