You can use it to make extra money and also reduce your monthly expenses to nearly $0/mo.
I shared in another post about our current house hack, and in this post I want to share about our previous house hack.
In order to take advantage of both house hacking benefits listed above, we knew we needed to do a few things:
- We needed to find a house off-market at a good price so we could make extra money by selling it for a profit a few years later. We also wanted the house to require some updating so we could fix it up some & increase our profits even further.
- We needed to find a house with some kind of detached structure that we could convert into habitable space.
- We needed to live in an area where there was a high demand for rentals (like near a college campus).
Here’s how we were able to accomplish each of these:
- My wife began door knocking in a neighborhood where we knew homes sold for a premium. She found someone who was willing to sell their home to us & we bought it off market a few weeks later. Because real estate commissions weren’t involved & we didn’t have competition like you’d have on the market, we ended up getting a good deal from a great family. And there were parts of the house that weren’t updated where we knew we could add immediate value.
- This house had a detached garage with a storage room attached. We believed we could add a wall between the garage & the storage area & convert the storage area into habitable space.
- This house was only a few blocks away from the local university. We knew there was a high demand for rentals in that area & once we finished the project described in #2 above we’d be able to easily rent it out.
We bought the home in January and began to do some updating.
We completely remodeled the master bathroom and the guest bathroom, thereby adding immediate value.
We also began the work to convert the storage room to a little tiny home.
We finished most of these renovations by about August of that year & listed the guest house on Airbnb.
Because we paid cash for the house, our only expenses each month were taxes, insurance, and utilities. All of those together were about ~$900/mo.
After several months of welcoming guests on Airbnb, our average monthly income from Airbnb was about ~$1,200/mo. That basically reduced all of our primary housing costs to $0.
We lived there for several years, enough to meet the conditions of the IRS Home Exclusion requirement, and we sold it for a profit of $68,000 (due to the low purchase price + the updates we did). We were able to take all of that $68,000 in profit tax free.
Over the course of several years, through this house hack, we made quite a bit of extra money & were able to live basically free.
We continue to believe this is a great way to supplement your ministry income!
