My Experience On How To House Hack A Duplex

House hacking was one of the best financial decisions I’ve ever made. I’ve talked about it before in my house hacking guide but, house hacking a multifamily property is one of the ways to do it.

In this post, I’m going to talk about my experience, how you can go about house hacking a duplex, and some tips to help you do it successfully.

My experience house hacking a duplex:

A few years ago, I became a landlord after purchasing my first investment property.

It was a side-by-side duplex that had over an acre of land but was still in the city. It was in an area that was close to family and it seemed to be priced low considering the size of the lot (most lots in the area were less than 7k square feet).

I was moving from an expensive apartment at the time and loved that the mortgage for the duplex was cheaper than the rent I was paying at the apartment by a few hundred dollars (but came with a lot more benefits.

After negotiations and some back and forth – I became the owner of a two-family house.

Before looking for property to purchase, I didn’t plan on house hacking. I just needed a place near family to live in that my girlfriend, at the time, would be comfortable living in.

However, the duplex I purchased came with tenants. And since I only planned on making one unit my primary residence – I started house hacking.

How to house hack a duplex as a beginner

Being a beginner at anything is, for me, the hardest part of doing anything new. Between making mistakes, wasting time, and feeling like there’s so much to learn – there’s no shortage of discouragement.

However, house hacking a duplex comes with a lot of flexibility that softens the blow every time you make a mistake (I made plenty and still make them).

Like everything in life, there are pros and cons to rental properties.

So, don’t get caught up in trying to be “perfect”.

Start with your goals

The most important thing to do before house hacking as a beginner is to figure out your goals. Your goals will influence the path you take and your house hacking strategy.

For example, my goal has always revolved keeping things simple and as stress-free as possible.

This led me to make the following house hacking decisions:

• I didn’t want a property without a basement (which makes maintenance more difficult)
• I didn’t want an “up and down” duplex if it came with tenants on the first floor already (I would have had no way to inspect/maintain plumbing for the “up” unit without causing inconvenience to the “down” tenant
• Although my loan program allowed me to purchase up to four units with only a 5% down payment, I didn’t want to have to manage multiple tenants at one time as a beginner
• I didn’t want a property that I couldn’t afford without rental income
• It needed to make financial sense towards my ultimate goal of financial independence

If your goals include real estate investing on a regular basis and owning a lot of properties, your requirements for properties may look completely different from mine.

Start looking for your house hack

I found my duplex listed on Redfin; the same way you’d find a single-family house. I sent it to my real estate agent and that’s how I got the process started.

The duplex I purchased was priced too high for the average real estate investor. It also came with more responsibility (being a landlord) and needed too much updating to be attractive to most people looking for their own home.

If you’re new to rental property or property ownership in general, I’d recommend following the same path. Look on Redfin & Zillow for a duplex that looks attractive to you.

Start the buying process

The buying process typically goes like this:

1. Schedule a showing for the duplex with a real estate agent
2. Submit your offer to the seller
3. Offer accepted? Start your financing and due diligence process
4. Get documents from the seller (like lease agreements if there are tenants living on the property)
5. Complete inspections
6. Finish up financing (if you’re getting a mortgage)
7. Close on the duplex (basically means everything is done)
8. Get the keys to your new house hack

I simplified a lot of the process to keep things basic. But, a lot of the steps in the process above (and some not mentioned at all) won’t need your input much (if at all).

For example, when going through this process for my house hack – I was in Singapore and Thailand for about half the process (the property is in America) and everything still went smoothly.

Managing the house hack

House hacking is not much different than a typical rental investment property. The primary difference is that you, the landlord, live at the property.

So, when managing your house hack – you have a few areas to handle:

• Your monthly expenses (monthly mortgage payment, housing expenses, repair costs, etc..)
• Your rental income/cash flow
• Property management (maintenance specifically)

Your monthly expenses

This will change depending on many factors, such as:

• loan type (FHA loan, Conventional loan, etc.)
• down payment amount
• interest rates
• property taxes
• property insurance
• rental permits (depends on your local municipality if this is a thing)
• bookkeeping (to keep track of that extra income/cash flow)
• living expenses
• repairs for things that break
• and possibly more

Your rental income

You’re going to want to have a process for collecting the monthly rent from the tenant-occupied rental unit.

To keep things simple, here are two easy options:

• Collect rent online (My preferred method)
• Collect rent in person (Requires a time commitment of meeting with the tenant every month. This won’t be a problem since you live at the same property but can be inconsistent if you get sick or go on vacation near the days you collect rent)

Handling maintenance

Managing your investment property includes having to repair and maintain things as they break. If this is the first duplex that you’re house hacking and you don’t have any/much home improvement experience, I’d recommend finding a quality company or person for each area:

• HVAC
• Electrical
• Plumbing
• General stuff (a handyman)
• Painter
• Lawn care

This is the biggest variable out of all the main areas.

If you house hack a duplex that’s old and hasn’t had much work done, the maintenance-related expenses are going to be much higher than if you house hack a newer duplex.

This goes back to the section above about making mistakes. It’s likely that you’re not going to be able to estimate the maintenance costs very well.

However, the longer you own multifamily property – the better you will get at understanding what goes wrong and needs replacing.

Frequently Asked Questions: