Today Sarah Weaver shares her room rental house hacking story from Prairie Village, Kansas.
Want to try house hacking for yourself? I highly encourage you to grab a copy of our House Hacking Quick Start Guide (free) as you read along. Not only will it deepen your learning, but it also includes a cost-saving tip most house hackers miss.
House Hacking Case Study
Sarah works in the real estate industry at a real estate brokerage firm. Before house hacking in Kansas, she was living in a beautiful apartment in Denver. However, the costs of living in Denver were too much for her taste while on the path to financial independence.
Her reason behind house hacking started when “at 25, I knew I wanted to own rental properties. Cash flowing rentals would be my way to fund my lifestyle. I love the house hacking strategy because it allows you to put less money down. I could buy a house that needed repairs and pay for the renovations with cash because the downpayment didn't eat up all my savings.”
When she decided that she wanted to start house hacking, she knew that she had to leave Denver. Although she had $50,000 to pour into a property, the numbers weren't able to work out in the high cost of living area. With that, she knew she could make a more profitable house hacking investment if she moved to Kansas City. So she drove 10 hours east on I-70 intending to find a place to buy and house hack.
The House Hack
Once Sarah decided to house hack, she picked out a town outside of Kansas City – Prairie Village. She drove there on a weekend to knock on doors in the neighborhood. If someone answered, she asked if they would be willing to sell. Eventually, she found a for-sale by owner sign for a 3/1.
The owner was able to show her the inside of the house that day, and she made an offer the next day. She brought a purchase agreement filled out for $215,000, and the seller quickly signed on the dotted line.
Updating the Units
When Sarah bought the 3/1, she knew that she would be transforming the space into a 4/2. With that, there was a considerable amount of renovations that needed to take place.
Overall, she spent $9,902.68 on renovations. After that, she spent another $1,900 on staging the home for potential renters.
Sarah found tenants through her network. She had grown up in the Kansas City area. So when she posted on Facebook looking for roommates, she found an old high school classmate and another tenant with many mutual friends. She only needed two tenants to fill two of the spare bedrooms.
Once the tenants moved in, she decided to self manage with the help of Cozy.
The Numbers of the Deal
It’s time to find out exactly how profitable this house hacking strategy was!
Sarah used a conventional loan to purchase this $217,000 property with $5,715.44 down. The interest rate on the mortgage is 3.99%. With that, the monthly mortgage is $1,478.
Sarah rents out two of the rooms at $725 and $800 per month.
- Previous housing costs: $925
- Gross Rent: $1,525
- Mortgage payment: $1,478
- Cashflow before maintenance and vacancies: $47
- Total housing savings: $972
The cash flow of the property is cash flow positive. Plus, Sarah was able to live for free. When she decided to move out of the property, she was able to rent out her room for an additional $700. That led to a positive cash flow of $747 per month.
Want to live for free while someone else pays your mortgage? Dive into housing hacking with our House Hacking Quick Start Guide.
How to Connect
Are you interested in learning more about Sarah's story? You can connect with her on Facebook, LinkedIn, and Instagram @sarahdweaver.
The Learning Curve
Sarah wouldn't change anything about her first house hack. She was so happy with her decision that she took a three-month vacation to Europe to celebrate. Plus, she treated her dad on a trip to Scotland and Ireland as a thank you for his help with the renovations.
After spending some time at this property, she has moved on to house hack a duplex in Kansas City. With the money she is able to save, she has visited 16 countries and invested more in real estate.
The Bottom Line
Sarah's story shows that you can transform your house hacking opportunities if you are willing to move to another area. Sarah left the high cost of Denver living for Kansas City. With a full-time remote job, that was a possibility for her. How could you transform your financial future with a new location?
No savings to begin your house hacking journey? See how Rich began to save by accepting work provided housing.
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!
If you choose to pursue a house hack of your own, then please share your story with us! We would love to showcase your success.
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