Retired at 27!

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

10y

Congrats to you guys @Shelby Pracht! Thank you for sharing your inspirational story!

Adam Moreno

Clovis, CA · Member since 2015 · 2 posts · 3 votes

10y

Congratulations!. I had a question regarding your primary residence that you house hacked. Can you please define that term and explain how you implemented it in your situation. I think it means you lived in the house while you renovated it?

3 Reply

Brandon Gentile

Real Estate Agent/Investor · Clarkston, MI · Member since 2013 · 156 posts · 34 votes

10y

Wow, so awesome! Congrats! These stories are the best. Well said @Gino Barbaro, you dont have to have tons of money to be wealthy. Just enough to cover all your expenses and have the ability to escape and live life on your own terms! Very inspiring and a story that can help everyone to keep pushing and realize its not as far away as you may think! :)

Ryan Dossey

Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes

10y

That's awesome!

Ryan Billingsley

Investor/Realtor · Wentzville, MO · Member since 2014 · 846 posts · 431 votes

10y

@Shelby Pracht Congratulations on reaching your goals of financial freedom! You are an inspiration to me and many others who are chasing freedom from giving time for money!

Jason Krick

Investor · Reading, PA · Member since 2014 · 196 posts · 118 votes

10y

Fantastic story! Myself, and many others, wish we started earlier. You got out ahead, and secured your future. I'm determined to get there, but have further to go with overcoming poor choices when I was younger and living outside my means. You are "richer" than many people who have millions of dollars. That security is something that you can't put a price on. Everyone starting out should read this post Congratulations on your choices and success!

Shelby Pracht

OP

Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes

10y

Wow, thanks everyone for the support! Definitely feeling blessed.

@Adam Morenowhen I say house hacked, it normally means renting out part of your primary residence to help cover expenses. I think for a lot of people it means getting a roommate or living in one side of a duplex and renting out the other. We live in a ski resort town, so we rent out part of our condo nightly on Airbnb and it brings in 1100-1600/month, which easily covers our mortgage and expenses.

Julie MarquezPro Member

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

10y

Congrats to you and creating your own success on your own terms! Being wealthy is about being happy in your own way, and I'm so glad you have found a way to live out your passions. Thanks for sharing your story, it's inspiring for all of us!

http://www.zillow.com/homes/for_sale/Clark-County-...

Account Closed

Rental Property Investor · Vancouver, WA · Member since 2014 · 308 posts · 144 votes

10y

Awesome job! I'm currently at about 55% of my first goal of having the rents cover my current salary.

Next goal, $10k a month, then 20, then 30, etc. :)

I have my eye on my ultimate goal of being able to get into a home for my retirement that I would never DREAM of being able to afford.

This is the specific home I'm looking at:

Once I'm able to easily afford that home, I'll be looking at retirement. My current timeline is in around 8 years, when I hit age 49. :)

Congratulations to you both!

Matt Long

Rental Property Investor · Northeast Missouri · Member since 2016 · 21 posts · 10 votes

10y

Congrats. I think you have defined wealth on your own terms and that is exciting. Time is the real currency. We can always earn more money but time is the limited commodity.

Joshua D.

Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes

10y

@Shelby Pracht

Looking at this step for ourselves in the future.

What did you guys do for health care?

Edwin Gachinga

Rental Property Investor · Chicago, IL · Member since 2015 · 31 posts · 10 votes

10y

wow, i think you are on the right track but hold up a minute now Shelby ...I know you don't have to pay rent but how will y'all survive on $1,300 a month? And God forbid 1 tenant fails to pay up, gonna be some hard living ritirees

5 Reply

Frank Jiang

Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes

10y

Congratulations!

Would you mind sharing a bit more about the AirBnB operation?

Raw Revenue? Vacancy? Turnover costs?

Is expanding the vacation rental portion of your portfolio something you've considered?

Shelby Pracht

OP

Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes

10y

Hey @Joshua D.as far as health care goes we just signed up for Obamacare. I know a lot of people hate on it, but personally it's been great. The Covered California gives us some pretty good coverage through Blue Shield at a subsidized rate.

@Edwin Gachingayou're right, it's not much. We're pretty frugal though and have lived on that much before. Having our personal mortgage, utilities, HOA, insurance, etc, all covered leaves that 1300 for pretty much fun money. Neither of us have any car loans, student debt, credit card debt, etc. We have enough in savings that if we have a vacancy we would be fine for a few months. Both of us have other professional skills and could find jobs or side hustles if we needed to.

Mark Vejnar

Investor · Simpsonville, SC · Member since 2013 · 184 posts · 71 votes

10y

That's awesome. So what's the plan now? Vacation homes/rentals everywhere you like traveling? Make your adventures tax deductible? Great job!

Edwin Gachinga

Rental Property Investor · Chicago, IL · Member since 2015 · 31 posts · 10 votes

10y

@Shelby, wish you two the best and congratulations. It's certainly inspirational

Frank Eimiller

Rental Property Investor · Fond Du Lac, WI · Member since 2015 · 261 posts · 78 votes

10y

This is awesome!

Shelby Pracht

OP

Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes

10y

We've definitely considered expanding our vacation rental portfolio, @Frank Jiang and @Mark Vejnarbut I'm not sure if that's really the direction we are headed. I say that just because the airbnb needs to be really actively managed. In our own home it's not a big deal because we are almost always around to welcome guests and clean during turnovers, leaving us with very little expenses, but having to hire cleaners and property management would definitely cut into our profits for that.

You're welcome to take a look at the listing we have now- it's literally a bunk in our living room.

Frank, like I said our actual costs are very low because we do it all ourselves. We bring in an average of 1200/month, but it has been as high as 1650. Our utility bills probably went up about $40/month, and when we are out of town we have a cleaner that we pay on an as-needed basis to come in for turnovers. Maybe an extra $10/month in laundry costs? I actually enjoy having the motivation to keep our space really clean for guests. It's definitely been really lucrative but I also know we are in a pretty unique situation.

Todd Fithian

Investor · Riverside, CA · Member since 2014 · 239 posts · 177 votes

10y

Huge congrats!! Your post literally took the ideas and goals I have right out of my head. Love it!

Account Closed

Tampa, FL · Member since 2016 · 26 posts · 6 votes

10y

This is gold. Congrats guys!

Sounds like you care way more about being outdoors than about money. Seems like your priorities are right where they should be.

Jeremy (J.C.) Shields

Real Estate Agent · Las Vegas, NV · Member since 2015 · 12 posts · 2 votes

10y

Congratulations. Your story shows that being frugal is a quick way to financial freedom. It also made me rethink how much I'm spending.

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

10y

Originally posted by @Shelby Pracht:

My and my husband's goal was to be able to retire on our passive income by age 30. We just hit our goal, both of us at age 27! We are so excited and can't believe how our hard work paid off, and even more quickly than we imaged.

We started just two years ago, buying our own residence which we house hack and live for free in (some months even cash flowing a couple hundred dollars). Next we bought a duplex with some storage units that cash flows $800-900/month and a single family home bringing in another $500-550/month.

I know we are definitely not flush with money by any means, but to have all of our living expenses paid for by our house hack, plus an additional 1300-1450/month for gas and fun money is plenty for us! Our goal at this point was not to build a huge real estate business, but to be able to do the things we love while we are young. So for us to have the ability to travel, ski, rock climb, and backpack whenever we want in our twenties still is a major win, I think :)

Our very last paycheck!

How does that work with your primary residence for taxes when you are renting it so many days throughout the year? Do you have to depreciate part of your property or does it work differently than standard rental property? I was just curious because someone had told me when you rent over 14 days per year that it gets more complicated. I don't know much about it, just curious if that is a challenge.

Second question is I am curious why you didn't wait until you were 30 and just go crazy paying off the properties so you were totally debt free. That way if there is a market crash and you lose rental income, you don't have any debt to worry about.

Great job!

Franklin Romine

Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes

10y

Nice work. Keep the momentum. I was 30 when I got out of the race and was able to cover my overhead with passive income.

Franklin

Charles Moore

Investor · Lake Forest Park, WA · Member since 2015 · 108 posts · 35 votes

10y

@Joe Splitrockyou are right about things getting complicated if you rent out a space in your home more than 14 days out of the year. 14 days and under means you are not taxed on your earnings for those 14 days, no matter how much it is. Anything above that and including that though, is taxable. You also have to figure in the local hotel taxes for your county, and if there are any local laws or restrictions to it.

I'm curious to hear what their California situation looks like for this.