You can house hack as many times as you want. Although there are things to consider when trying to house hack multiple times (which we’ll talk about later), there aren’t rules preventing you from house hacking non-stop for decades.
That’s another benefit of house hacking. Regardless if you’re house hacking with a family or doing it solo, you have the ability to:
- buy a house hack
- live in it for a while
- move out of it
- rent your old unit
- purchase a new house hack and repeat the process
That flexibility gives you the opportunity to slowly, but consistently, grow your rental property portfolio while keeping your housing expenses low – if that’s what you want to do.
So, in this post, I’m going to talk about a few things you should consider if you’re thinking about house hacking more than once.
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How Many Times You Should House Hack
You should house hack as many times as needed to achieve your goal.
I don’t think anyone should do things just for the sake of doing things. When thinking about house hacking more than once, make sure it aligns with your goals.
Think deeply about why you want to house hack more than once in the first place. Your reasoning may be as simple as wanting to grow your real estate investment portfolio – which would make sense. However, if your goal is to live a comfortable and relatively low-stress life – there may be a better way.
Don’t fall victim to doing things just for the sake of doing things OR doing things just because it seems like a good decision. I’ve unfortunately done that many times and can let you know that it doesn’t make life more enjoyable
Things To Consider
In this section, I’m going to talk about a few things you should consider when thinking about house hacking more than once.
Your Loan Requirements
Depending on what loan you use for house hacking, your finance contract may require you to live in the property for a minimum number of years before you’re able to move out and rent the property completely.
For example, the loan that I used when house hacking a duplex was specifically for owner-occupancy. This allowed me to get better financing rates and lower down payment requirements but it also required me to live in the property for one full year before I could move and rent the property.
This wasn’t a big deal to me since I was planning on living there for longer than a year anyway.
Since me and my girlfriend still had our apartment for almost 6 months after I closed on our house hack – she continued to live at the apartment and I set up a makeshift sleeping pod that allowed me to renovate the inside of our unit while not breaking my financing agreement with the bank (I think I needed to move into the property within 60 days).
Debt To Income Ratio
Every property you finance will raise your debt. And although the rental income will help offset that debt – the bank that you use for financing another house hack may not include 100% of your rental income. And, if you’re in between tenants or end up with a bad renter that stops paying rent before a new house hacking opportunity pops up – your debt may become more of a problem.
Recommeded Reading: How To Find Good Renters
Mortgage Limit
Fannie Mae allows us to have up to 10 conventional mortgages.
As you increase the number of mortgages you have, it becomes more difficult to secure the next. So, if you’re considering house hacking multiple times – you’re going to want to learn and create a plan for looking less risky to lenders in the future.
Since I don’t have a lot of mortgages, I can’t speak from personal experience on what you should do to make yourself look less risky to lenders. However, most lenders like to see a lot of liquid cash (and assets) and a low debt-to-income ratio.
You bring enough of those two things to the table and I’m positive lenders will look at your situation much better than someone with little cash, a high debt-to-income ratio, and a lease agreement showing how much rent they’re going to make.
Your Mental Strength
Owning and self-managing rental property is relatively easy and passive most of the time. However, when things need your involvement – sometimes they REALLY need your attention.
For example, you may get a call, text, or email about a leaking faucet. Sounds like a simple fix. However, when you go to replace the leaking faucet – you notice that the sink cabinet is completely rotted due to the faucet leaking for many months before you got notified. And fingers crossed there’s no subfloor damage.
The example above could turn a 1-hour fix into an all-day (or multi-day) project; what would have cost $100, can now cost $800 (or more).
As you grow your investment portfolio of properties, situations like the example above will happen more frequently. And you need to be mentally prepared to handle them without stressing yourself out.
