Househacking during a recession?

While we aren't technically in a recession yet (two consecutive quarters of declining GDP) it seems highly likely that it will happen due to the current economic decline caused by the coronavirus and job loss coming from Covid-19. With all of this going on lots of people are confused on what their next moves should be? Since I work with a ton of househackers (80% of my business currently) I have seen all sorts of opinions and feelings about what people want to do now and in the near future.

I'll say that personally I am currently househacking and while writing this article I am actually under contract on my next duplex to househack also. My current househack that I am living in is a single family with ADU (accessory dwelling unit) and I am under contract on a duplex. This next househack will be my third and actually my second househack. Since starting househacking and investing in 2016 I have lived in 2 duplexes and this SFH w/ADU. I sold the first duplex after moving out to buy more rentals and am now currently up to 20 units. All of my househacking has been done in expensive markets such as Minneapolis and Austin, TX. I househack where I want to live and invest anywhere I want.

Obviously I'm a big fan of househacking. I'll continue to do it as long as I can and recommend anyone who's even mildly intrigued by the concept look into it further and read the book by Craig Curelop titled Househacking. But that doesn't answer the title of the article.

Is now a good time to get into househacking?

I would argue YES. In my opinion there isn't a bad time to get into househacking. Househacking does a few things for you when done right that are hard to beat. And these don't change no matter how the economy is doing.

1. Reduces your living expenses. Average 2 bedroom rent is $1343. Average househacker payment is $500.

2. Builds wealth. Housing appreciates over long periods of time.

3. CASHFLOW. Analyze properties through BP calculators and make sure they make sense!

4. Loan paydown. It's slow but you do pay down these loans!

5. Tax savings through interest deductions. Nothing beats getting a tax benefit from your tenants paying for you to live.

6. Learning how to invest and be a landlord. This is huge for new investors. It's a cheap and easy way to learn the landlording game.

All for 3-5% down! You really can't beat that. I, and people I have helped have lived completely for free, even made money. At this point I want to live in a nicer place with more space so I'm buying a duplex with 3 bedroom units so I have a guest bed and an office but I sucked it up for a few years and rented out every square inch of my first duplex. I even rented out the porch on AirBnB and made it a nice little bedroom for longer term guests that needed a cheap place to stay. Househacking allows me to live the lifestyle I want and not have to be in one place all of the time. If I'm not in it for a period of time I can just rent it out. I like to take month vacations and just rent out my unit when I'm not in it. Make sure you follow your local laws and regulations with short term rentals but most areas consider more than 30 days not "short term".

Back to timing and househacking. I sold a few properties to househackers that closed right before Covid-19 started. I reached out to everyone and the overwhelming response was, "I'm so glad I'm househacking!" People are scared, I am too. But I know one thing. I'm less scared with a severely reduced living expense. God forbid I would have a nice single family house and a $3000 monthly mortgage payment or be stuck in an apartment building sharing a wall with 2 dozen other people. It's hard to see why househacking would ever be a bad idea, as long as the numbers work. If you can rent it out after moving and make a profit that's certainly not going to go away in the future. No virus is going to remove the demand for nice, affordable housing in nice areas!