House Hacking 101 - How Living Smart Can Jumpstart Your Wealth
What Is House Hacking?
House hacking is a simple but powerful strategy for building wealth and learning about real estate investing while you live in your home. At its core, it means you live in part of a property while renting out the other part (or even just a room) to cover your expenses. The rent your tenants pay helps offset your mortgage, taxes, and insurance - sometimes even allowing you to live for free.
It’s a strategy used by countless investors, including Brandon Turner and David Greene, who were made household names in the investing world during their time on BiggerPockets. Both started with house hacking early in their journeys and built from there.
Over the past few years, I’ve had the chance to get to know Brandon personally through his new platform, The Better Life Tribe, as well as one of his high-level masterminds. What’s refreshing is that he’s just a regular guy who turned his passion for real estate into a platform that helps people all over the world. And like everyone else, he started small - with a single home purchase - and built from there.
But long before it had a name, many everyday investors were already doing it - myself included.
My husband, Brandon Turner, and myself at a 50 event.
My Story: House Hacking Before It Had a Name
As I mentioned in the first blog of this series, my own house hacking story began when I bought my first home at 25. At the time, I was traveling five days a week for my consulting job, and having roommates gave me peace of mind because someone was always around to watch the house.
The huge bonus? Their rent covered my mortgage, taxes, and insurance. I was only responsible for utilities, which we split three ways. In other words, I was living for next to nothing, which meant I was able to save money for future investments (and my wedding!). That experience gave me the confidence (and the seed money) to move forward in real estate.
Rob’s House Hack: Graduate School on a Budget
Interestingly enough, my husband, Rob, actually house-hacked before I did. While in grad school, just blocks away from where I bought my home, he purchased a modest 2-bedroom, 1-bath house. He finished the basement, adding another two bedrooms and a full bath.
Through three years of graduate school, he lived with three roommates. Their rent covered the bills and created income while he built equity. Nearly 30 years later, we still own that home today - and it continues to provide steady rental income and has grown tremendously in value.
Duplex across the street from my first house I bought.
Our First House Hack as Newlyweds: The Duplex
Our first real estate endeavor as newlyweds came in 2000 when we purchased a duplex. We lived upstairs in the one-bedroom apartment and rented out the larger main house. To boost the income potential, we finished the basement, which significantly improved the rental income.
That was just the beginning. While we lived in our little one-bedroom apartment, we purchased a sweet but tired two-bedroom, one-bath Cape Cod down the street that came with an extra lot. We subdivided the lot, built a new construction home to sell, and renovated the Cape Cod into a 3-bedroom, 2-bath home for ourselves.
The renovation and subdivision story is one for another blog post, but the lesson here is important: we always moved from one house hack to the next, kept the previous property, and leveraged owner-occupant financing along the way.
We bought this house along with an empty lot. First we built new construction on empty lot and sold it, renovated this Cape Cod house and lived in it.
Why House Hacking Is the Perfect First Step
House hacking isn’t just about living cheaply - it’s about building a foundation for real estate investing. Here’s why it’s such a powerful first step:
Owner-Occupant Financing Advantage - Since you live in the property, you qualify for residential loan programs with lower down payments (sometimes as low as 3-5%), lower interest rates, and more flexible terms than an investment loan.
Immediate Cash Flow Potential - Even if you’re just covering your mortgage, taxes, and insurance, that’s thousands of dollars saved each year.
Equity Growth - While tenants help pay down your loan, you’re building ownership and value.
Experience Without the Risk - You learn the ropes of being a landlord in a lower-stakes environment.
Portfolio Growth - By moving from one house hack to the next, you can build a rental portfolio while continuing to buy new homes as a primary residence. That’s exactly how we seeded our early portfolio.
Ellie as a newborn being pushed by my father-in-law in front of the new construction house that we built next door to Cape Cod house.
Is House Hacking for You?
House hacking isn’t always glamorous. You’re sharing your space, dealing with tenants, and sometimes learning lessons the hard way. I also have some priceless stories to share - the kind you could either laugh or cry about! But that’s part of the journey, and those moments are where the best lessons (and sometimes the best memories) come from.
If you’re planning to buy a home, ask yourself: could this also be my first investment property?
Final Thoughts
Looking back, house hacking was one of the best financial decisions we ever made. It allowed us to live cheaply, save for the future, and build equity and cash flow at the same time. Each house hack gave us a stronger foundation - and the homes we kept became the seeds of our rental portfolio.
The beauty of house hacking is that it works whether you’re just getting started, want to live lighter financially, or dream of building a portfolio. It’s the perfect way to begin your journey into real estate investing.
At Sarah Lee Living, our mission is to Educate, Empower, and Serve through real estate. That includes helping you think creatively about how to make your home not just a place to live, but a tool to build wealth.
👉 Thinking about your first home purchase? Let’s explore if house hacking might be the right move for you.
