Room Rental House Hacking in NYC with the Millers on Fire:

Today we are back covering the Room Rental style of House Hacking with our guest is Mrs. Miller. The Millers are a couple in their thirties that share money optimization skills. Mrs Miller’s Latina and a native New Yorker. She’s a first-generation college graduate who is on the FIRE journey. Mrs. Miller is a personal financial blogger at the Miller’s On Fire where they focus on financial independence and early retirement. Their blog shares everything from money hacks, cost-cutting tips and one of the things I really like about their blog is they actually share some of their money mistakes cause I’m a really big believer and you can learn more about your mistakes than sometimes your successes. So I love that they shared that on their blog. Mrs Miller’s been featured on the Her Dinero Matters podcast and other websites like Clever Girl Finance, The Financial Diet and The Money Hacking Mama.

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Notable Mentions:

Her Dinero Matters
Clever Girl Finance
The Financial Diet
The Money Hacking Mama
Paula Pants Afford Anything
Handful of Thoughts
Simple Path to Wealth

How to get in touch with today’s guest:

Guest Website:


Transcript of the show:

Intro (00:03):
Across the world. People have their housing costs taken away as much as half of their income. Have you ever thought of trying to change that? The good news is there is a way house hacking is real and we are here to show you how other people just like you have made it happen. Welcome to the house hacking podcast and here is your host house hacking expert, Andrew Kerr.

Andrew Kerr (00:29):
All right, I am really excited today about our guest. Our guest is Mrs. Miller. The Millers are a couple in their thirties that share money optimization skills. Mrs Miller’s Latina and a native new Yorker. She’s a first generation college graduate who is on the FIRE journey. Mrs. Miller is a personal financial blogger at the Miller’s On Fire where they focus on financial independence and early retirement. Their blog shares everything from money hacks, cost-cutting tips and one of the things I really like about their blog is they actually share some of their money mistakes cause I’m a really big believer and you can learn more about your mistakes than sometimes your successes. So I love that they shared that on their blog. Mrs Miller’s been featured on the Her Dinero Matters podcast and other websites like Clever Girl Finance, The Financial Diet and The Money Hacking Mama. So at this point I want to welcome on Mrs. Miller.

Mrs. Miller (01:26):
Hi Andrew, how are you?

Andrew Kerr (01:28):
I am wonderful. Thank you for being on the show. So where are you calling in from today? How are you doing? What’s the weather like? All that fun stuff.

Mrs. Miller (01:36):
Yeah, so it is like 65 degrees today. It’s a perfect fall day here in New York City.

Andrew Kerr (01:42):
Oh, wonderful. You’re in the city. What? What borough do you live in?

Mrs. Miller (01:45):
I live in Manhattan, so I live in the Lower East side. Yeah.

Andrew Kerr (01:50):
Oh, so have you always been Lower East side or is that sort of a progression where, where you moved over there?

Mrs. Miller (01:55):
No, so I’m originally from the Bronx. Well, actually I lived in Manhattan when I was a young kid and we moved to the Bronx when I was maybe in the second or third grade. And then I moved back to New York City when I moved from California back to New York.

Andrew Kerr (02:11):
Yeah, I love New York city. I try to go at least once a year. If it was up to my wife, we’d be going on a lot more frequent. But you know, we love the city. So let’s really sort of get into this. Thanks for being on sort of sharing your house hacking experience. Could you just give us this sort of high level summary of, you know, a minute or two, what’s your house hacking experience was how old you were, where you did it, that sort of recap of it and then we can really dive in after that.

Mrs. Miller (02:38):
Yeah, absolutely. Um, so I lived in California. I moved to California in 2008 and in 2010 I bought my first home. I was in my twenties. Um, the market was a buyer’s market. I got into a neighborhood that I probably would have never been able to afford before the recession. So I bought a three bedroom, two and a half bathroom house. And I lived in that house with just me and my dog, my Labrador mix for a few months. And that summer, or actually the summer of 2011 um, that’s when I gained two roommates.

Andrew Kerr (03:17):
Cool. So that’s a really good summary. Thank you for that. You know, maybe a really good place to start is house hacking is obviously become very trendy. Like where did you sort of first hear of that idea and did you know about that idea when you sort of bought the house and started doing this room rental thing or just sort of where did it all come about?

Mrs. Miller (03:38):
Yeah, I wish I could say that all of that was intentional. So in October, 2010 I closed on my house and I moved into this really big house. It was about 2300 square feet and I had never had a roommate in my life, not through college, not even growing up. And I’m one of five kids. I always had my own room and my own space. So I purchased this home because the market was really good and I was good. I was able to afford the payments and I was living life. Um, what happened was that I had a close friend of mine who had a friend who needed a place to stay and asked whether or not I would consider having a roommate. And I thought about it and I said, yeah, sure, why not? She’s in college. She’s not going to be there forever. Um, I thought it would be a great opportunity. So in the summer of 2011 in August, she moved in. And so that was how that started. About a month later, I got a phone call from the same friend who said, Hey, I have another girl who needs a place to stay. I know you have three bedrooms. Would you be willing to gain another roommate? And so a month later in September of 2011 I had my second roommate.

Andrew Kerr (04:53):
You know, sorta thinking back, you bought this house. I mean, this is sort of, isn’t this the typical American dream is we’re told you go to school, then you go to a good college, you get a good job, you buy a house, you buy a new car, and here you are buying a couple thousand square foot place. It’s what, three bedrooms, how many bathrooms did it have?

Mrs. Miller (05:11):
It was a two and a half bathrooms that were two bathrooms upstairs and then half a bathroom on the first floor.

Andrew Kerr (05:17):
And then you were planning on just living in it by yourself. And I think in the personal finance community, we would say that seems crazy. But in the normal, everyone else in the U S and around the world, that’s normally what you do, right?

Mrs. Miller (05:30):
Yeah, exactly. I actually thought I was behind the game. Right? So in New York, owning your own place is unthinkable, uh, sort of unimaginable. But in California, there were a lot of people who were in their early thirties, late twenties, who had their first home. So I said, okay, I need to sort of get on the ball here and get my act together. So, uh, I purchased this home.

Andrew Kerr (05:56):
All right. So when you bought in 2010 how old were you at the time?

Mrs. Miller (06:00):
Ooh, now I have to do a little bit of math. I was about 26, 27 years old.

Andrew Kerr (06:06):
Okay. And in what part of California were you in?

Mrs. Miller (06:08):
This is in Northern California. In Sacramento.

Andrew Kerr (06:11):
Okay. So still, I mean, California is still a relatively higher cost of living area, but when you were compared to back to New York, it was obviously still still cheaper.

Mrs. Miller (06:20):
Yeah. So I bought this home. Um, it costs about $285,000. And again, this is in late October, 2010 so this is in the middle of the recession. So a lot of the home prices had just plummeted and I was fortunate enough to take advantage of that.

Andrew Kerr (06:40):
Very cool. So you bought the house for 285. Tell me a little bit about when you bought it. What was the process? How did you find this house? I mean, obviously you weren’t looking at this as like a multifamily or to do a house act. Like, what was your mindset of, you know, what, what, what was your pick list of things you sat down with the realtor and said, I gotta have this, this, and this. You know, what was that and what was that sort of mindset that you were looking for?

Mrs. Miller (07:00):
So I was not like a typical home buyer. I did not want a big backyard because I did not want to have to deal with yard work. And so what I wanted was at least two bedrooms and two bathrooms and I had a dog. And so I wanted a neighborhood that was either close to a dog park or that had a lot of green space, but I didn’t want the yard, the yard space myself. I actually looked at quite a few properties, but there was two that really stuck out to me. And this is the first house that I actually fell in love with, but it was under contract. So I had to sort of put it out of my mind and keep looking. So the second house that I looked at was a house that, uh, was a multifamily. It was a two. Um, it was a two unit property.

Mrs. Miller (07:50):
Um, the first floor had two bedrooms, two bathrooms, and then the second floor was a one bedroom, one bath. So even though I didn’t know what house hacking was, I really didn’t know what real estate investing was. I did have a sense that if I could have someone else pay for some of the mortgage, that that would, that sounded like a good idea. So when the house that I actually did buy came back on the market, it was the house that I love. I did, you know, it was a beautiful house. It was a newer home. I bought it in 2010 and it was built in 2008 so I knew that I wasn’t going to have to worry about making home improvements, at least for a while.

Andrew Kerr (08:31):
Absolutely. I mean that was the way I was when I was 20 about my first house. I bought the townhouse and I bought something that was newer construction because I was lazy, didn’t want to have to do yard work on Saturday morning. I didn’t want to have to worry about maintenance. So I get you fully on that of like not wanting the big yard and all of that stuff. All right, so you found this house, it was sort of off the Market and under contract it came back up, so you closed on it. What type loan did you get? What’d you have to do for the down payment on it? Just tell me a little bit about that.

Mrs. Miller (09:00):
Yeah, so I had a, uh, sorry, I had an FHA loan and I put about three and a half percent. So it was about $10,000 down that I put on the home.

Andrew Kerr (09:12):
Yeah, I think that’s the sort of standard first time home buyer loan program. I’ve used the FHA before. I’m actually just closed on my fourth house hack and I actually did an FHA loan. Again, I had the money for the down payment, but I wanted that money to actually, instead of putting 20% down, I wanted to have that to do renovations and do an addition. So I did the FHA loan too, I think is a great way for people to get into a house. And especially if they’re trying to do a house Hack with a little bit of money down.

Mrs. Miller (09:39):
Yeah, that was, I mean I have the $10,000 cause I actually over um, requested for my college student loans. So this was some money I had saved from a college student loan.

Andrew Kerr (09:53):
Creative way to come up with the down payment.

Mrs. Miller (09:55):
Right. And I wish I could say again that that was intentional. It’s just I had this money and I knew that I wanted to have some money in savings so I had some money in savings and that’s what I use for the down payment.

Andrew Kerr (10:06):
While it might not have been the best thing to have extra money on a student loan, you at least did something somewhat smart with it. Right. I know people that were like, Oh I want to go travel so I’m just going to take a bigger student loan and use that money to go travel and well that’s a cool life experience. Or using it for a down payment on a car. You know, you’re buying a depreciation that depreciating asset where at least here you invested in a property which is, you know, a lot better than completely going out and just blowing that extra student loan money.

Mrs. Miller (10:33):
Right, right. Exactly.

Andrew Kerr (10:36):
Now, when you bought it, you put the 3.5% Down, did you actually pay for the closing costs or did you negotiate that into your contract?

Mrs. Miller (10:44):
I negotiated that, uh, within my contract, my house was actually a short sale. I think I forgot to mention that. So, um, I was, the bank was actually willing to pay the closing costs.

Andrew Kerr (10:56):
That’s really cool. So can you briefly explain what a short sale is for folks that are listening that might not know what it is?

Mrs. Miller (11:02):
So the previous owners actually bought this house for about $450,000 and when the market tanks, so did property values and in order to get out from under this house that was no longer worth $450,000, they made a deal with a bank that basically said, we will give this house back to you. Uh, or actually, sorry, the previous owners owed more on the house than what the house was worth. So what they were able to do was, uh, sell the property for less and didn’t have to basically get foreclosed on. And so they ended up selling the house for 285,000 even though they had a loan or mortgage for 450,000. And I was the benefit that, I benefited from that.

Andrew Kerr (11:56):
Yup. And it was basically the bank saying, if they don’t keep paying their mortgage, we’re going to have to foreclose on it. We’re going to lose all this money. So instead of spending these money on legal fees and the foreclosure processings, we’ll discount that sales price. And here you are. You, you just bought a house for 285 that two years earlier was brand new construction, 400,000 plus dollars. So you ended up getting a pretty good deal here.

Mrs. Miller (12:19):
Yeah. And again, the location was fantastic. This was an area that I would have never been able to afford. And even today, um, houses in that area are going, uh, $500,000 plus.

Andrew Kerr (12:32):
All right, so you bought the house, he did three and a half percent down the bank, which was going to be the owner of it, essentially paid the closing costs for you, but you bought it for about 10 grand. What were your payments then at the, at that time after you closed?

Mrs. Miller (12:46):
So I included the mortgage insurance cause I did have PMI and the real estate property altogether. And my monthly payments were about close to $1,900 a month. It was about 1875 a month.

Andrew Kerr (13:01):
Okay, so you’re 1875 a month. So before you bought that house, what were you paying for? For rent?

Mrs. Miller (13:08):
Oh boy. So I had a two bedroom apartment, one bathroom, and I was paying about $800 a month. So my, my, uh, housing costs doubled, more than doubled.

Andrew Kerr (13:21):
it. And you laugh, but that’s like what the typical person does. They’re like, Oh great, maybe I can buy a house where my housing costs is equivalent to what I was paying in rent. But most of the time it ends up being a little bit more if not a lot more.

Mrs. Miller (13:33):
Right. I guess my thinking was, Oh, this is going to be a house. It’s worth the money and it will appreciate, um, and the apartment is worth this much. Right? This $900 a month rent. But a house is where so much more. So again, I, I wish I could say all of this was done because I had a well thought out plan, but I didn’t. And I think that’s pretty typical.

Andrew Kerr (13:59):
Well, I think this is this normal fallacy that we all fall into. It’s, we’re told from a really young age that buying a house is a good thing because you get a tax deduction and now you’re paying down your mortgage and your building appreciation. But when you actually look at it, most folks, especially in the personal finance community, actually say a house isn’t an asset. The house that you’re living in is actually something that’s always going to cost money. Even after the mortgage is paid off, you still have insurance, you’ll still have maintenance, you still have taxes on it. It’s something that really does cost you money in the long run.

Mrs. Miller (14:30):
I actually remember one of my coworkers saying that exact thing, like, you know, you make good money if you buy a house you can deduct the mortgage and the mortgage interest and your tax bill is going to go down. And it was like, yeah, okay, that sounds like a great idea.

Andrew Kerr (14:47):
I know. I just find that so crazy. I’ve heard that over and over again, especially in coffee shops now. We still hear it and I just roll my eyes. I don’t even bother trying to say anything. But you know, you can lead a horse to water but you can’t force him to drink. So a lot of times I just don’t talk with people unless they’re ready to ask. All right, so you basically doubled your housing costs to be in this home because it was what every typical American does. What was your career at the time? What were you doing out in California for your, your career or your job?

Mrs. Miller (15:16):
Uh, so I am and was a, a criminal defense investigator. So I worked for the federal government at that point.

Andrew Kerr (15:24):
Oh, very cool. And then you had just bought the house, if I remember correctly, you said you were single, you bought this all on your own, it was just you. Is that correct?

Mrs. Miller (15:33):
Yeah, just me and my dog.

Andrew Kerr (15:36):
What type of dog do you have?

Mrs. Miller (15:38):
Unfortunately he passed away. Yeah. But, uh, he was a Labrador mix. He was a lab-corgi mix. So if you think of a black lab with very short legs, he was a low rider is what my brother would call it.

Andrew Kerr (15:52):
Oh, funny. A low rider. Yeah, we’re big dog lovers. We have two Boston terriers, which we absolutely love there. There are fur, fur babies, children, so to speak.

Mrs. Miller (16:02):
Yeah. And you know, one thing that I did want to mention in addition to like getting, you know, sort of seeing my peers in their early in their early thirties late twenties buying a home, it was also something that I didn’t really see. It wasn’t reflected in my own family. Right. So I was very proud to be able to say that I’m a home owner because I did grow up in pretty, we weren’t really poor, but we were lower class. And so home ownership was something that I really wanted to do and sort of to say like, look, I made it, you know?

Andrew Kerr (16:38):
Yeah. That’s what successful people do is they buy houses. It’s the, yeah. Like you said, the typical American dream is you buy and you own your own home. Yeah, exactly. All right, so you’ve got these two roommates. It sounds like you had this really great friend that referred two people over to you. How did actually work out going from living on your own to having actually two roommates that were actually your tenants?

Mrs. Miller (17:02):
The, they were actually, it was a fantastic situation. So these two women moved in and we actually became incredibly close friends. Um, it was a learning experience for me because I hadn’t lived with anyone, so I had to learn how to share and how to learn, how to sort of live in the same space. Um, but I had an ideal situation where the two women were fantastic. They were about my age, they were both in college. And so it was a really, it really worked out that way. Of course, you know, just like in any living situation, whether it’s with a roommate or even with a spouse, you know, there’s some things along the way that you have to learn about each other. And um, you know, just for example, cleaning what one standard, one person’s of cleaning might be different. Um, but it really was an ideal situation. It worked out really well.

Andrew Kerr (17:55):
Awesome. So you have two of them in there. What were you charging them for rent and obviously did you take the master bedroom and bathroom and then they shared the other bathroom?

Mrs. Miller (18:05):
Right. So I had a master bedroom that had an on suite and then there was a second bathroom and they shared the bed, the bathroom between the two of them. Um, I did not know what to charge. I didn’t know what was the going rate for a room. And so I just picked some number arbitrarily and charge them each $450. And so I had an extra income of $900 a month, which I thought was pretty good.

Andrew Kerr (18:35):
Yeah. Here you are thinking like, great, I finally achieved the American dream, I bought a house and now I’m actually collecting this sort of side income. And I mean a reality you, you basically doubled your housing costs when you went from renting to own it, but now you sort of brought it back down. So in a way you’re, you’re almost back now to even, what’d you guys do for utilities?

Mrs. Miller (18:56):
Um, so I didn’t, again, this was my inexperience. I didn’t charge them any, anything extra. It was $450 a month and that included internet, cable utilities. Um, and we actually only had cable for maybe about a year. I think none of, uh, is none of us are right word? None of us were of the, uh, TV watchers. So we ended up cutting the cable, but it included everything else that utilities and, um, water and everything like that.

Andrew Kerr (19:29):
Okay. And then how are you actually collecting the rent from your roommates? Was it just bring me $450 in cash, PayPal, Venmo, know, what were you doing for collecting rent?

Mrs. Miller (19:40):
Yeah, they each gave me, Oh, actually one of my roommates paid me in cash and the other roommate, she was living off of student loans and financial aid. So she would actually pay me, uh, by semester, which was great. So what I did was with the roommate that paid me by semester, I just deposited that check straight into my savings account. And then the roommate that paid me monthly, I would, I would deposit that into my checking account.

Andrew Kerr (20:08):
Okay. So you saved one the other you used for just general life expenses going out, whatever you wanted.

Mrs. Miller (20:15):
Yeah, unfortunately I wish I would’ve taken the additional $450 cash and deposit it into my savings account. But it went into my checking because it was convenient thing to do. Uh, and rarely did it ever get transferred over into my savings. So it became part of my additional income, discretionary income to, to sort of spend.

Andrew Kerr (20:38):
Yeah. Don’t feel bad. I feel like most of us have been there. I blew so much money in my twenties. It wasn’t even funny. I didn’t really grasp the concept to savings until I was in my late and then moving into my thirties when I was like, Oh my goodness, I’m actually behind probably where I should be now. I actually got to start saving and investing. So I think we all go through that. I mean that’s, isn’t that the like typical thing is as we get older we get wiser.

Mrs. Miller (21:01):
Yeah. I did the math on this and it’s pretty heartbreaking. So from each of them, they average living with me about 37 months. So we were roommates for three, three years in some change. Um, and so I collected from each of them about $16,000 so $16,000 went into savings and I have no idea where the other $16,000 went. When you think of it that way, or when I think of it that way, I just, it’s sort of like Palm to forehead emoji. Like why, what in the world was I doing? Um, there were some, you know, some traveling that I did, but not, not $16,000 worth.

Andrew Kerr (21:47):
Yeah, I know. Looking back you’re just like, where did the money go? The upside is you at least saved half, half of it. 16,000. The other 16,000, who knows. Alright. So you said they all live there about three years with each other. So what caused them to move out? Was it just different period of life? Did you guys start having challenges? Did you sell the property? Like what was the big catalyst for the change there?

Mrs. Miller (22:09):
So one of my roommates actually got married, um, and she moved out in April, 2014 when she got married. And then the other roommate, she stayed with me until I got married. And so she, so I had, um, just one roommate until January, 2015.

Andrew Kerr (22:26):
Okay. And then along that sort of three years there are there, did you ever do a rent increase on them or anything at all?

Mrs. Miller (22:33):
This is a fail. This is a total house hacking fail. So I didn’t know what house hacking was. I didn’t know what to charge in rent. I didn’t think about including utilities and I didn’t even think about raising the rent. They were my friends. Right? Um, what they became friends afterwards. And in my mind I was sort of in a fortunate situation that I could afford the mortgage on my own and I was just fortunate to have two people that I really liked paying me money to live there.

Andrew Kerr (23:01):
Well, I think a lot of us, especially when we start getting into real estate investing or trying to do house hacking, we don’t know how to do all of that in the show notes. I’ll actually link to a couple articles on my website where we talk about some tools you can use to figure out what average rents are for an area and a couple of different tools to look at how much to increase rent per year and software for actually managing tenants. But you’re in that typical spot back then where most people where it’s like, great, I’m going to buy a house, I’m going to rent it. Like what do I actually charge? Maybe I ask a realtor and that’s sort of the extent of folks knowledge. Um, where typically you might want to do a 2 to 5% increase in rent per per year. But like you said, they became friends and you’re like, Oh, it’s nice to have this extra money. I was to pay for it myself. So if I’m saving, you know, four 50 a month and I’m spending the other four 50, I’m in a better situation than I would’ve been.

Mrs. Miller (23:53):
Yeah, I mean I think I didn’t think of it as a business and I should have because if I would’ve thought I, my strategy would have been different if I would’ve thought of it as a possible source of business income. You know, if I would have thought about having the two roommates, even though we really got along as sort of a business.

Andrew Kerr (24:14):
I love that you just said that because whether you’re going to do house hacking to become a full time real estate investor and that’s your entry point, or you’re just thinking of doing house hacking to have extra money to save for your kid’s college tuition or to save for retirement or to help you to pay down debt. I really think you should look at it with this mindset of it is a business and look at it and manage it like it is a business. And if you take that approach versus it’s, oh, it’s just little, little thing I’m doing over here, you’ll be much more successful if you have that mindset.

Mrs. Miller (24:48):
Yeah, I agree.

Andrew Kerr (24:50):
All right. So you had them live for about three years. You got engaged, you got married, they moved on. Did you, and now your new husband stay in the house? What, what, what was the transition out of this? I mean obviously that was in California. We know you’re in New York. Sort of fill me in on the, on the gaps in between there.

Mrs. Miller (25:06):
So what happened? And so, uh, my husband and I got married uh, in April of 2015 and we lived in the house until, well, I lived in the house until October, 2016 I got a job opportunity, um, in New York city. I wanted to come back to New York city cause all of my family is here on the East coast. Um, and so I knew that it was something that I had in mind. And when the opportunity came up, I took it. But I had actually three weeks to move from California to New York. My husband was in school at the time, so he couldn’t get up and leave right away. And so he stayed in the house until, uh, the end of the school year until the end of the semester, which would have been December, 2016. We did, we talked about whether or not we wanted to sell the property, but it was right getting into the winter months. And I didn’t think that we would get what I wanted for the house if we sold it. So I wanted to try out the idea of becoming a landlord. And once my husband, uh, we basically spoke to a couple of property managers and we put the property on the market. And, um, and we did that in November of 2016. So my husband was still there, but we said if we get a tenant could move in right away, he would just move in with family for the short period. And so he came out to New York city, um, in December. Um, so the house didn’t rent. There weren’t any takers. And again, I think it’s sort of a bad time to try to get tenants or even home buyers. So in early December, thankfully we finally got someone who was willing to move in, who was wanting to move in, uh, at the start of the year. So my husband moved to New York city. We, uh, put the property, you know, we basically fix up the property and when I say fixed up, it was, we just needed to do a little bit of cleaning and painting and cleaning, cleaning it out, emptied out the house. And, uh, he moved out and they moved in.

Andrew Kerr (27:15):
Great. And you actually hired a property manager to take care of that process for you?

Mrs. Miller (27:20):
We did. I was starting a new job and I was all the way in New York City and I had no idea how to be come a landlord. So I figured it was just worth it to me to hire a property manager. And that was, he did all of the screening. Uh, he put the ads out, he took the photos. Um, and that was how that was what worked for us.

Andrew Kerr (27:46):
And how’d you decide on picking that? That guy as the property manager?

Mrs. Miller (27:50):
I had a friend who was a, um, a real estate agent and I asked her if she had any recommendations and she referred me to the property manager that we have.

Andrew Kerr (28:01):
And that’s a great resource is to find folks that are in the business or related business and ask for referrals, whether it’s someone, a contractor to do maintenance, sell a home, buy a home, or even find a property manager. All right, so you picked a property manager and what did he, did he suggest what it should rent for or did you sort of say, great, here’s what we want for it? How’d you decide on what to rent it for?

Mrs. Miller (28:24):
Yes, of course. Like the inexperienced person that I was, I told him what the rent was going to be. So I included all of my, all of the costs that it would take to cover the rent, the mortgage, the house insurance, and the real estate taxes. And then I added, you know, a little bit to give us quite a little bit of a buffer. So I told him what it would rent for and I think that was probably why the property sat for as long as it did. So we ended up having to do a rental decrease.

Andrew Kerr (28:59):
So what did you initially market it to rent for?

Mrs. Miller (29:03):
I believe we were asking 2,500 I think maybe it was like 2475 was what I wanted. Yeah.

Andrew Kerr (29:10):
And what’d you end up renting? Renting it at?

Mrs. Miller (29:13):

Andrew Kerr (29:15):
Okay. So it’s enough where it’s covering your costs if you’re at that 1875 a month and a little bit extra in there.

Mrs. Miller (29:22):
Yeah, and actually I need to add one thing in between. When my husband and I got married, we had a 30 year mortgage and we actually went down to a 20 year mortgage because the interest rates on, um, housing properties were so low that I went from a three and a half percent interest on the mortgage to a two and a half percent. So we actually decrease what our interest payments were going to be, but it increased our mortgage payments a little bit. Um, so actually it sort of leveled out because I think we were paying about 1870 or, I was paying 1875 before and then it went up to about 1900. So it’s not, not much

Andrew Kerr (30:00):
Roughly the same, but you also cut several years off of the, the total length of the mortgage and got a cheaper interest rate.

Mrs. Miller (30:07):
Right, exactly. Um, so yeah, we needed, we needed to make sure that the rent was at least 1900 to break even. But I, um, but you know, we were also gonna have additional costs. For example, the property manager fee.

Andrew Kerr (30:22):
Yup. So you went from buying a house to having some room rental house hacking to now becoming a landlord. Do you stone that property today? Is that original tenants still in their, sort of fill us in on, on that period of time.

Mrs. Miller (30:35):
So we still own the property today. We are still landlords, but we have different tenants. And so, uh, I sort of understood at this point increasing that it was a business and so we were able to increase between tenants and also actually when the first time it was there, we did a slight increase. It was more important to me for a to make sure that the property was occupied. Um, and now we are on our third set of tenants.

Andrew Kerr (31:03):
And do you have any plans to sell the property anytime soon or is it working now where you’ve got the professional property manager, you’re collecting enough rent, you’re doing yearly rent increases, you’re treating it like a business.

Mrs. Miller (31:14):
This has been a big question. Um, we had to make a decision this year in order to see whether or not we were going to take advantage of the capital gains tax that there is, uh, when selling a property. So as you know, if you own a property for five years and live in the property two of the last five years, you don’t pay any capital gains on the profit up to $500,000 for a married couple. So I really debated it. Um, and sort of that time has come and gone. So I think by default we let that lapse. But it has been such an easy situation for us. I get an email from my property manager maybe once or twice a year. Um, I don’t get any complaints. I get that monthly check in my checking account. Um, so it’s, it’s worked out really well.

Andrew Kerr (32:08):
Now when you’re getting those checks every month, are you putting aside any money for future expenses, maintenance expenses or like the roof that could, I know you it was new construction in ’08, but at some point a roof is going to come due and some bigger stuff. Are you planning for that yet or have you not started thinking about that process?

Mrs. Miller (32:24):
No, absolutely we have. So right now, um, are because the rent has increased over the last several years, we are now making a pretty good profit. And so what we do is that after the mortgage is, and everything is paid, um, all of that extra money goes to a separate money market account. Um, we had it in a savings account, but just if there were any costs, it was just a little bit easier to just have it in the money market account. Um, so that’s what we do. And so we have a buffer there.

Andrew Kerr (32:59):
You’re actually doing it the right way. Now. You’re collecting enough rent, you’re putting money aside for maintenance, for capex. You’re treating it like a real business. That’s phenomenal.

Mrs. Miller (33:07):
I learned there was some lessons to be learned and I think I’ve learned them.

Andrew Kerr (33:12):
Yeah, real estate investing is a process that you need to learn. There’s so many great resources online and that was the big reason why I really wanted to start this podcast is to help folks do house hacking, hear from other folks like you that said, you know, it’s turned out to be a success, but we made a lot of mistakes along the way. So you’ve got that property. Have you bought any more property since then? Have you done any other house hacks?

Mrs. Miller (33:36):
Uh, so we do have a unique house hacking situation, but we have also looked at, uh, we were actually under contract for a three unit multifamily in Florida. Um, and that was also a short sale of that lasted about seven months and the bank didn’t, uh, like our offer. So we walked away from that. Um, we also looked at buying some rental property in Alabama. Um, and I sort of cringe with that one because there was some really great properties that needed a lot of work and it sort of scared me and I look at them now at how much they’ve sold for and it hurts a little bit that I didn’t take advantage of that. So our house hacking situation today is when we moved to, uh, New York we had an apartment, a 400 square foot apartment, and we were paying about $2,300 in rent. My grandmother owns what is called the co op here in New York city. So it’s, you can have a condo or rent an apartment, but New York is unique in that it has something called a co op where people own shares of a building and your shares could be worth a one bedroom or two bedroom or a studio apartment. So my grandmother actually owns her co-op and she, her health was declining. Um, so we lived in this apartment on our own for about a year and a half. And what started happening was that I needed to stay with my grandmother almost every weekend. And so me and my husband, she had a two bedroom apartment we would say over the weekend just to kind of help her out. And when our rent, a renewal lease was coming up, I tossed out the idea to my husband of moving in permanently to the second spare bedroom that my grandmother had. Now she owns the apartment out-rent. So there’s outright, so there’s no mortgage, but there is maintenance fees, but it was still reduce our costs by more than half. So we’ve taken over the maintenance fees and we pay about $1,200 a month for a two bedroom apartment with a balcony. We doubled our size and reduced our costs.

Andrew Kerr (35:58):
That’s pretty amazing. Yeah, you went from like 2300 a month to 1200. You’re able to be there with your grandmother to help take care of her very unique situation. And I just think that’s amazing,

Mrs. Miller (36:10):
Right? I mean, and it’s actually not unique, especially coming from the Latin culture to live in intergenerational households. Um, but a lot of people sort of looked at us and question what, what we were doing. Um, and if we were struggling financially and it wasn’t that at all, it was a situation where we could help out my grandmother be there for her and we also benefited or we benefit financially as well.

Andrew Kerr (36:37):
Is your husband Latin as well or was this sort of a cultural shock? Like you are used to it because you know, this is sort of part of your culture and how’d that work of, you know, Hey honey, we’re going to move in with my grandmother. It seems completely normal view. Like what, what was his initial reaction?

Mrs. Miller (36:53):
Yeah, he was all for it because he’s on fire so he uh, he loved the idea, especially because we have been already sort of living with not living with her, but we had stayed with her, um, you know, several weekends out of the month and he saw this situation. Um, he was a little bit worried about me actually. He was worried about what that would look like. Um, as far as uh, you know, being, you know, having, it’s my grandmother but it’s still being in somebody else’s space, right? Like at the end of the day it’s her apartment sort of, you know, he was worried about if that would affect me in any way and there have been some challenges but I don’t regret it and it’s been great.

Andrew Kerr (37:38):
Yeah. I think the chance to be able to live with the family, help out your grandmother, give you guys a unique situation where it’s not a complete free rent situation, but it’s helping you drastically reduce your costs of living in a high cost of living area. Like New York city is just a wonderful situation. I mean, to me that’s what house hacking is all about. There’s some very traditional ways to do it. Like what you sort of started out with and stumbled into accidentally that room rental or buying that small multifamily and living in one side or another. But having all these unique situations, I think of four, if we actually think creatively, we can come up with all these really cool ways to really drastically reduce or eliminate our housing costs,

Mrs. Miller (38:18):
right? I mean housing, transportation, we’ve, we hear it all this time. Housing, transportation, and food costs are the most, uh, is where your, your salary goes to, right? This is where your highest expenses and if you can find ways to reduce your grocery bill, your housing costs and your transportation costs, like you will come out so much more ahead. And for some people it’s a sacrifice. Oh, I would never want to have a roommate. Oh, we’re married. How could you have someone you know, live with someone else? And it’s okay. You don’t have to make that those choices if they don’t fit for you. But what would happen to your financial situation if you did?

Andrew Kerr (38:58):
Absolutely. You know, I really liked Dave Ramsey really early on in my sort of investing career. And then I think that’s where a lot of folks in the personal financial community, as they start with a Dave Ramsey type mindset, and they really get in this sort of FIRE or FI set. But one thing is I really love that he says is live like no one else today so you can live like no one else tomorrow and you hit a perfectly, let’s make these small little sacrifices today that can have this huge impact way down the road. It starts off as a little small ripple, but then it keeps getting bigger and bigger and bigger and has this great impact on our life in another decade or two. All right. So that’s sort of a good point I think to transition over to the sort of final three house hacking questions that I have. You know, and really the first one is what do you think your biggest win or your major success was from these multiple different house hack that you’ve done?

Mrs. Miller (39:54):
I wish I would have known then what I know today, right. Today it’s the, the opportunity to save and invest, uh, the difference between what we need to live and what we earn. And so I wish I would have known then what I know now. Um, but I think, you know, one of the biggest benefits of taking on those two roommates, number one, it was learning how to live with someone. I cannot imagine what it would have been like to go from living by myself or almost three decades and then getting married. I think that would have been a much more challenging, situation

Andrew Kerr (40:30):
It made life a lot easier for your husband. Those two friends could break you into being a good roommate.

Mrs. Miller (40:36):
Right, right. Exactly. I mean, it sounds so silly, but I mean it was huge. And I know for me there was a lot of learning and growing up that I did and there was also some selfishness that I had to realize, um, that I needed to work on while I had my roommates. So when my husband and I got married and we moved in together, it really helped. Um, and you know, being able to, even though I didn’t optimize all of the money and didn’t maximize that situation, I was able to save, you know, when my husband and I got married, this was before we do what financial independence was, you know, I was able to save the money from my roommates and when we got married, we didn’t go into debt. We were able to use savings that I had, um, to afford our wedding and our honeymoon and our startup costs for starting a life together.

Andrew Kerr (41:26):
That’s awesome. And now the second question was, what’s your biggest sort of failure from the house hacking period? And I think sort of just touched on that.

Mrs. Miller (41:34):
Yeah, it was not saving all of it. I didn’t need the money that was coming in and I don’t think it’s there’s anything wrong with, you know, if you earn a little bit more to, to spend a little more, but it has to be intentional and it wasn’t intentional for me. What was happening was that I look back now at those $16,000 and I have no idea where that money went. And so that was my biggest fail.

Andrew Kerr (42:03):
So would you do a house hacking project again in the future?

Mrs. Miller (42:08):
I would and actually my husband and I considered it when we were still living in California. We still had, it was just the two of us and we still had these two empty bedrooms. So we consider taking on a roommate. We just didn’t find the right situation. Um, but I would definitely do it again under the right circumstances.

Andrew Kerr (42:27):
Yeah. Wonderful. Sorry, you also gonna I want to just want to add on that. Are you still thinking of being a future real estate investor and expanding your sort of from your one property in California to other areas?

Mrs. Miller (42:39):
Yes, we are looking, we’re constantly looking. We actually right now have sort of a savings account for real estate investing that we just continue to contribute to. Um, especially after my Alabama experience. Like I want to make sure that I’m not scared of renovations because of the costs of the upfront cost that comes with that. So we are looking at good properties. I think right now the real estate market or the real estate investing market isn’t what it used to be. So it’s a little bit higher threshold to get in, but it’s definitely something that we are looking into.

Andrew Kerr (43:16):
Yeah, I think anyone that’s been doing real estate for any sort of period of time has really filled that where the market seems to be overheated or the barrier to entry isn’t what it used to be. Especially, you know, house hacking, there’s still easy ways to get in, but if you’re trying to buy a true investment property, it’s definitely a lot harder to do deals now than it was, you know, two years ago, let alone, you know, in ’09, ’10, 11.

Mrs. Miller (43:40):
Yeah, I mean there are places, um, as I said, I, you know, we, I’m not afraid of doing an out of sight at a state of rental property because California has worked out so well for us. This is why I’ve been looking at, um, Alabama. I’m, I had never been to Alabama. I had a work conference and I knew that Alabama had some lower, uh, properties, uh, lower cost properties. So I just took the, the work trip while I was there and, um, sort of talk to a real estate agent and scouted out some properties. So there are places in the country where it’s a little bit easier. Definitely New York is too expensive for us, but, um, you know, you just have to, it depends on what your risk tolerance is.

Andrew Kerr (44:24):
Yeah, absolutely. I love how you added in to do a little scouting on your work trip. No better way to do that. Right? I mean, if work’s already paying for you to go there, might as well, they’re like, Oh, let me go drive around instead of, you know, going to that happy hour, let me go out and go look at a few properties or talk to an agent or a local investor in that area.

Mrs. Miller (44:41):
Yeah, I think I, our work conference started on a Monday and I just flew out on a Friday night, so I spent the weekend looking at properties.

Andrew Kerr (44:48):
Awesome. All right, so at this point in the show, just before we wrap up, we like to ask all of our guests a set of a final six questions and we like to call this the Famous Six. All right. You ready for it, Mrs. Miller?

Mrs. Miller (45:06):
All right, let’s go.

Andrew Kerr (45:07):
All right. Number one, what is your favorite personal financial blog or book that you’ve read recently?

Mrs. Miller (45:13):
Um, right now I discovered a new, a fairly new blog called Handful of Thoughts that I’ve really been enjoying, but I think my favorite book ever was, um, JL Collins Simple Path to Wealth. That book was life changing for me.

Andrew Kerr (45:27):
Yes, I love his book and I love the stock series on his website. It’s so phenomenal. We’ll link to those in the show notes for everyone, so if you haven’t heard of them you can definitely check them out. So number two, what’s your favorite real estate related blog or book that you’ve read recently?

Mrs. Miller (45:42):
I’m sure everybody is going to say bigger pockets, podcast and blogs, but I actually also like Paula Pants Afford Anything. I think that was one that I related to the most because she had, you know, she has just a few properties and the way she started was sort of accidental, which I think I related to a lot.

Andrew Kerr (46:03):
Yeah, I think BiggerPockets is like always been this go to place where you can hear multiple people’s stories, but I used to follow, Afford Anything. Paula’s website as well, early on where she was one of the really first big websites that I came across and I think a lot of people came across, here’s a story of an individual person doing real estate. And early on she was really great at sharing her numbers of here’s what we brought in, here’s how the actual work that we’re doing. And I remember the one where she was talking about buying Ikea cabinets to install. So yeah, I love her stuff.

Mrs. Miller (46:35):
All of those are book marked for me.

Andrew Kerr (46:38):
Awesome. Awesome. All right, so number three, what has been your favorite travel destination so far?

Mrs. Miller (46:45):
Uh, so recently my husband and I had just came back from Ireland. We took a two week road trip throughout the country and it was one of the best vacations I’ve ever had. It was, I’ve been to a lot of places and uh, Ireland is a beautiful country and it was a great way to experience it during that road trip. I loved it.

Andrew Kerr (47:03):
So we’ve actually talked about doing that as well, saving up some time or doing a little mini sabbatical and do the road trip where you just, you know, you rent the car and you, it’s not a huge country, but just having the car to go around for two or three weeks. Yeah, it’s, it’s on our list. Our problem is there’s too many travel destinations on our list and we can’t seem to get to them fast enough. All right. So, uh, next is where are you going to go next for travel vacation? Is there anything on your list that’s coming up?

Mrs. Miller (47:28):
Um, so have been talking about doing, finding another country like Ireland where we could be outdoors a lot. That was something that made the Ireland trip so beautiful. We went at the end of September and the weather was great and the tourists crowds weren’t as big. Um, so doing the hiking and just exploring outside was really great. So if you have any suggestions, let me know. But, um, I looked into Greenland, um, but I, but I, I don’t know. I’m not sure yet. We haven’t decided on what we have. I have a long list of countries that I want to go to. Africa is probably my top on my bucket list, but I want to do like a month trips. I can go to as many safaris as possible. Um, but for next year we haven’t quite decided.

Andrew Kerr (48:14):
Well one me and my dad and I’ve been trying, it’s more of, we’ve talked about it and me more trying to convince him as this sort of, you know, father son trip, but you might be interested to do it with your husband if you like hiking is in Scotland, they have the West Highland way. It’s this hundred mile hike where you go basically from Northern Scotland to Southern Scotland. And the way there’s all these tour companies that basically set it up to make it easy for you. So you walk a portion of the trail for a day, then you get off the trail and you stay at a little bed and breakfast and the tour company gives you all sorts of maps and guides and that normal typical stuff. But then they move your luggage for you each day. So the next day you wake up, you pack up your bag, you leave it, and then you go on the trail and hike and you only need your day pack, you know, your five, 10 pounds, whatever you need for the day. And you don’t have to lug your 30, 40, 50 pound bag. And so my dad, when he heard about that, he was like, Oh, that’s rough in it a little bit, but I get a real bed and a hot shower in the morning and then I don’t have to lug a 50 pound sack across a trail. So maybe look up that one doing the a West Highland way, uh, hike in Scotland.

Mrs. Miller (49:17):
Uh, you, your listeners can’t see this, but I am writing this down. That sounds fantastic actually.

Andrew Kerr (49:24):
Awesome. Now, what is the biggest bucket list item that you haven’t accomplished yet?

Mrs. Miller (49:30):
Reaching financial independence and early retirement.

Andrew Kerr (49:34):
Ah, so where, where are you on the timeline then?

Mrs. Miller (49:37):
Um, so we are about 41% of the way. I added the numbers recently because I’m a money nerd like that. Um, so we’re about 41% of the way. And to be honest, my husband is more interested in the early retirement. I actually have a job that I love a lot. I get a lot of fulfillment out of, but it would be great to be able to have longer, um, travel experiences. Uh, this past two week vacation that I had was the longest vacation I’ve ever taken. Um, and I think this is probably why it was one of the best because I felt so refreshed. I was, when it was time to come home, I was ready to come home and get back to work. I didn’t need a vacation from my vacation. So I would love to get, um, to have the opportunity to, you know, be able to extend that time by either going, working part time or maybe doing contract work.

Andrew Kerr (50:27):
Yeah. One of the things that I really noticed that first sort of 10% defy to 25% getting there is the hardest. And then once you start to cross that 50% threshold, it all just starts to compound and roll faster and faster. Where I almost feel like it doesn’t, you know, the first 50% is the toughest and the second 50% you’ve got the momentum going and it’s so much easier to get there.

Mrs. Miller (50:49):
It’s amazing. It’s incredible. I think we originally had a date set out for 2027 and right now it looks like we’ll probably will reach that at the beginning of 2026. Now of course this all depends on the market and all of that, but you know, we were able to top off one year because of that compound interest.

Andrew Kerr (51:08):
Yeah, that’s amazing. All right, and our final question in the fast six is what is your favorite life hack?

Mrs. Miller (51:15):
Travel hacking!

Andrew Kerr (51:16):
Oh, is this a credit card rewards and travel hacking that way?

Mrs. Miller (51:20):
Yes, exactly. So I traveled a lot for work and accumulated a lot of hotel reward points and mileage just from traveling from work. But we also do, um, you know, we’re a little bit of credit card turners so we never carry a balance. We don’t pay interest, but we put as many of our expenses on credit cards paid off in full every month and rack up the reward points that way.

Andrew Kerr (51:44):
Awesome. I am right there with you. I’ve actually got a series just finished. I’ll put it in the show notes. It’s all about travel hacking, credit card churning rewards and specifically how it pairs really well with house hacking and real estate investing because you could have this big expense of I gotta buy a whole new appliance set or I got to do carpet or paint and when you can put a lot on the credit card, it helps you get those sign up bonuses. I do have one question though. Are you a Marriott or Hilton loyalist?

Mrs. Miller (52:11):
Neither one. I’m a Hyatt person.

Andrew Kerr (52:13):
Oh, you’re Hyatt.

Mrs. Miller (52:15):
Hi. I think Hilton just requires too many points to stay per night, so I an unfortunately Hyatt, isn’t spread around the globe isn’t as big. They don’t have a big of a footprint out there, but when I can, I try to say at Hyatts they have an incredible reward system.

Andrew Kerr (52:34):
I really love Hyatt. It’s just, I looked at it, that same thing of where I’ve got almost all my work related business related travel is domestic. And then internationally when I was looking at their global footprint, I realized a lot of the places that we wanted to go, there’s just more offerings with you know, Diamond and Marriott. So I actually spend the first sort of nine months of the year getting diamond with Hilton and then I switch over and push really hard to get as high as I came with Marriott. So I try to work both of them, but uh, maybe if I travel enough I can throw a, some, a world of hide in there as well.

Andrew Kerr (53:08):
Awesome. Well Mrs. Miller, thank you for being on the show. I really appreciate you sharing your story. All the good parts and even the bad parts, the things that you say are mistakes could have done differently because again, it’s, that’s really how I believe we learn the best is learning by our failures and the mistakes of others. We can say, ah, they realized they would have done it differently. Let me not make that same mistake or go down that same path and learn from them. So I appreciate you being so open and sort of sharing that it’s obviously had a lot of a positive impact on you. I can definitely see that. And what started off as just buying a house ended up turning into a great rental property. So you really lucked on that standpoint. But just thank you again so much for being on the show.

Mrs. Miller (53:50):
Thank you so much for having me. It’s an amazing, uh, it’s been an amazing time. Thanks.

Speaker 1 (53:58):
Thank you for listening to the house hacking podcast. For more up to date information on house hacking to access links and resources mentioned in today’s show, and connect with the guest and host head over to That’s www fi by rei dot com where your house hacking journey begins.


Be sure to check out our Ultimate Guide to House Hacking for a great overview of the different styles of house hacking and different types of tenant bases.

Check out the home page for “The House Hacking Podcast” here.