House Hacking: How to Buy a Duplex at 19 and Live for Free

10,000 to 15,000 dollars. That is what it costs, on average, for a college student to pay for housing in just one year. Not to mention, college students have to deal with paying for tuition, food, and books. So what if we could take a huge load off all these payments? Well, let me introduce you to an idea that could effectively lead to you living for free, and lead to even making some money on the side.

What is House Hacking?

House hacking simply refers to purchasing a multi-family property, living in one unit, and renting out the others to fully cover your mortgage. This property could be an apartment, condo, or any form of housing with more than one bedroom. Let's say that after reading this article, you decide to buy a 3 bedroom apartment. Let me quickly go over the statistics for this theoretical property:

Mortgage: $1,850/month ($22,200/year)

Location: Mid-sized college town

Down Payment: 3.5% FHA loan = $10,500

Number of Bedrooms: 3

Rent Collected:

• Bedroom 1: $900/month
• Bedroom 2: $900/month

Total Personal Rent: $50/month

As I am positive you can see, House Hacking is an incredibly effective way to reduce your monthly rent to essentially nothing. Before, you were paying 1,000 dollars a month just to live in a single room. Now, you are charging others what you used to pay. 

Starting during college at 19 or 20 years old provides a significant advantage in the world of real estate. If you were to buy a property your freshman year of college, when you graduate, the property would be increasing in value for 4 years. So a freshman who house-hacks a $300,000 property could realistically graduate with $60,000–$90,000 in home equity, while spending little to nothing on housing during college. That's one reason many real-estate investors consider house hacking one of the most powerful ways for young adults to build wealth. 

For our example, the only capital needed to purchase the apartment was the down payment, under an FHA loan. FHA(Federal Housing Administration) loans are designed specifically for first time buyers, allowing you to purchase property with a down payment of 3.5%. $10,500 was this number in our illustration. In order to buy a property, you need to have these 10,500 dollars ready. There are two ways to accomplish this. One, maximize your income to save ten grand: pick up a campus side-gig, flip items on digital marketplaces, or offer freelance services like tutoring or social media management, and channel 100% of that income into a high-yield savings account. Or instead, have a parent co-sign in order for you to meet the $10,000 mark. 

-What to Look for in a Property-

There are three crucial things to look for in a property, and the most important is likely location. 

1. Location is absolutely necessary, specifically to college students, as being near to campus is convenient to your future renters. The closer you purchase from campus, the more your competitiveness increases, and the more likely it is for students to pay more for the rent. 

2. Find an "Ugly Duckling" property, with quick fixes to improve the aesthetics of your apartment.  You want a structurally sound building that only needs low-cost cosmetic upgrades, like a fresh coat of paint or new lightbulbs, which you can easily DIY over a weekend to instantly boost the property's rental value. 

3. Layout is something that isn't required, but will improve the privacy and relationship between roommates, which is often overlooked. Look for a layout that has independent rooms and enough bathrooms, so you don't end up sharing one with three other roommates. Lastly, ensuring enough parking space is a must.

-Risks of House Hacking-

Owning a piece of real estate during college comes with significant risks. Repairs, vacancies, difficult roommates, and property management complications are likely to occur. In order to overcome or prevent this, consider having a cash blanket of about 3 months of expenses for the piece of property. Depending on which type of property you have, this might check out anywhere from 5,000 to 10,000 dollars. In order to overcome vacancies, try to implement posts on Facebook groups or campus housing boards. To avoid having difficult roommates, contemplate if screening roommates would be appropriate. 

-Keep it Long Term-

The true power of house hacking extends far beyond simply saving money during college. By the time you graduate, you could have tens of thousands of dollars in home equity while your peers leave school with nothing more than a lease agreement and years of rent payments behind them. Instead of spending four years paying a landlord, you spent four years building ownership in a valuable asset.

After graduation, you have several options. The first is to continue living in the property while working full-time, allowing you to save and invest even more money. The second is to move out and rent your bedroom to another tenant, transforming the property into a fully occupied rental. In this scenario, all three bedrooms generate income, potentially producing positive monthly cash flow while the property's value continues to appreciate.

Many real estate investors use this strategy as a way to acquire additional properties. The equity accumulated from your first house-hack can eventually be used as a down payment on a second investment property. Over time, this process can be repeated, allowing one property to become two, two properties to become three, and so on. While building a real estate portfolio takes years of patience and discipline, house hacking provides a practical and relatively low-cost entry point into property ownership.

I urge you to research the concepts covered more in depth, and inform yourself about the different opportunities you have at your feet. Remember, our most valuable asset while in college is time. Not free time, but time for real estate properties to appreciate. While house hacking might not be for everyone, it provides a lower barrier for entry and it can transform housing from a major expense into one of the most powerful wealth-building tools available.