Sarah Wilson, the creator of Budget Girl, shares her multi-family with a roommate twist house hacking story from College Station, TX.
House Hacking Case Study
Sarah is a communications specialist at Texas A&M but also runs Budget Girl to empower people to learn about money. She heard about the idea of house hacking from friends and podcasts. At the time, she was living in a two-bedroom apartment and splitting rent with a partner. When she learned that rent was about to increase significantly, she decided to get serious about house hacking.
When she found a move-in ready duplex, she decided to move forward with her house hacking plans.
The House Hack
Sarah bought the duplex in 2020. She was able to rent out one side for $1,050 per month. Plus, her roommate pays $500 in rent. The cost of the property was $230,000.
Each side of the duplex is a three-bedroom – two bath space. Both units have small private yards, and the property is under 25 years old.
Updating the Units
The duplex was essentially turnkey. But Sarah is also redoing the floors and upgrading the space through some DIY upgrades in her unit. When the current tenant on the other side moves out, she will also make some minor upgrades to that space. With that, she will not need to put too much money into the repairs.
Sarah has one tenant on a housing voucher who was an original tenant at closing. She tracks the costs of the house hack and manages tenants on a spreadsheet.
The Numbers of the Deal
It’s time to find out exactly how profitable this house hacking strategy was!
For the duplex, Sarah used an FHA loan to put down 3.5%. She was able to secure the property for $230,000, which was $10,000 under the asking price. She was also able to lock in a 3.65% interest rate. Overall, the total monthly cost is $1,700 including principal, interest, taxes, and insurance.
The total rental income of the unit, plus a roommate, leads to $1,700.
- Monthly housing expenses before house hacking: $665
- Gross Rent: $1,700
- Mortgage payment: $1,700
- Cashflow before maintenance and vacancies: $0
- Housing savings: $665
Although the property is currently cash flow neutral, it has the potential to be positive when Sarah decided to move out. Plus, she has been able to eliminate her housing expense!
The Learning Curve
Sarah is happy with her decision to pursue house hacking. Although she is just getting started, she plans to save and invest the savings she is able to create. She has a goal of refinancing once she hits 20% equity in order to get rid of PMI and lower her overall costs.
Get In Touch
If you are interested in Sarah’s story, then you can find out more on her blog, Budget Girl. You can also connect with her on Instagram @gobudgetgirl, YouTube @budgetgirl or Facebook @gobudgetgirl.
We also just featured Sarah on the podcast. Be sure to check out her episode here: https://fibyrei.com/150-mortgage-payment-through-house-hacking-with-sarah-the-budget-girl/
The Bottom Line
Sarah has used the idea of house hacking to eliminate her housing expenses. It is possible for you to do the same!
If you are interested in creating your own house hacking story, then check out our ultimate guide, listen to our house hacking podcast, or read more case studies for inspiration. You never know how dramatically your life can change through this one choice!
Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions. You can find her work in publications such as Bankrate, Business Insider, Money Under 30, and her own site – Adventurous Adulting. If she isn’t writing, you’d likely find her exploring her home state of Florida.
You can connect with her on her blog Adventurous Adulting.