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Writer's pictureTroy G. Smith

House Hacking 101: Living Smart by Owning and Occupying a 4-Plex



What is House Hacking?


As a real estate broker with years of experience, I've assisted countless individuals in their journey to find the perfect home. Today, I want to introduce a strategy that might not be on your radar but can potentially change your housing and financial future significantly. It's called house hacking, and it involves owning and living in a multi-unit property—specifically, a 4-plex.


For those who aren't familiar with the term, 'house hacking' refers to the process of buying a multi-unit property, occupying one unit yourself, and renting out the remaining units. The idea is that the rent you collect from the other units offsets your mortgage payment, possibly even covering it entirely.


So, What's a 4-Plex?


A 4-plex, quadplex, or fourplex, as the names suggest, is a single residential building split into four separate units. When you purchase a 4-plex, you have the opportunity to live in one unit and lease out the other three.


The Perks of House Hacking with a 4-Plex


1. Slash Your Housing Costs: With the rental income from the three units, you can significantly offset your monthly mortgage payment. In some scenarios, the rent might cover your entire mortgage payment, freeing up more of your income for other purposes.


2. Build Equity Effortlessly: Even while your tenants help pay down your mortgage, you're gaining ownership interest in your property. This can set you up for long-term financial success and potentially open doors to further real estate investments.


3. Tax Benefits: As an owner-occupant landlord, you may be eligible for certain tax deductions and depreciation associated with rental properties. These can be significant, so consult with a tax professional to understand these potential benefits.


4. Ease of Property Management: Living on the property makes it easier to manage. You'll be there to handle any maintenance issues promptly, and your close presence can encourage tenants to take better care of their units.


5. A Practical Learning Experience: House hacking is a fantastic hands-on way to learn the ins and outs of being a landlord and real estate investor without a steep learning curve or overwhelming risk.




Tips for Successful House Hacking


  • Location, Location, Location: As in all real estate ventures, location is critical. Ensure you choose a desirable area with access to amenities, schools, and transportation that will attract quality tenants.


  • Get Your Finances in Order: Understand the financial aspects thoroughly, including potential income, expenses, and the impact of possible vacancies. It's recommended to speak with a financial advisor or real estate professional to get a clear picture.


  • Screen Tenants Thoroughly: Given that these tenants will be your neighbors, you'll want to ensure they are respectful and reliable. A robust screening process is essential.


  • Enlist Help When Needed: Even as an on-site landlord, you may need to engage professionals, such as property managers, real estate attorneys, or accountants, especially when you're starting out.


  • Prepare for Landlord Duties: Understand that being a landlord comes with its own set of challenges. Familiarize yourself with local landlord-tenant laws and be ready to handle potential issues professionally.


In conclusion, purchasing a 4-plex and living in one unit while renting out the rest could be a smart and viable option for those looking to make their housing situation work for them. It's an innovative strategy that combines homeownership, investment, and learning all into one.


Remember, like all investments, house hacking with a 4-plex comes with its own set of challenges and risks, so do your due diligence, conduct thorough research, and consult with professionals. With careful planning and execution, this could be your game-changing first step into the exciting world of real estate investing.



If you have any questions, or if you're considering this exciting path, please don’t hesitate to reach out to our team at SmartPointe Real Estate for expert guidance. Our team would love to show you available options.


Here's one of our clients that did exactly what is being discussed in this article!





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