so even though you don't own your own property you can still house hack and save tons of money
hey everyone I'm chris and welcome back to the channel where we talk about investing
real estate and saving money so in today's video I'm going to share with you guys how I house hack
our two-bedroom house so that we can live for free if you don't know house hacking is when you buy a
duplex or a triplex live in one rent out the other one so that the rent will cover your mortgage
and housing expenses the ultimate goal of house hacking is to drastically minimize your expenses
so that you save tons of money and then you can ultimately live for free like I've said
we have a two bedroom house it's not a duplex or a triplex and because we live in one of the
most unaffordable cities here in new zealand we borrowed a lot of money from the bank so I wanted
to make the most out of our situation there are actually places in new zealand where it's much
easier to house hack because real estate is cheaper and I actually want to move sometime in the future
but this is our situation now and I really wanted to make the most out of it back in 2016 my husband
and I bought this house for five hundred thousand dollars with a four hundred thousand dollar
mortgage because the bank required a twenty percent down deposit and ever since then we've
always rented out the spare bedroom we've tried airbnb we've tried short-term tenants we've tried
long-term tenants and I'm happy to say now that our current tenant has been with us since 2016.
back in 2016 our mortgage was 600 per week so that's 200 dollars between myself my husband and
my flatmate because our flatmate was paying us 200 per week as rent when I was living by myself I was
actually living in a one-bedroom flat my landlady lived upstairs so she was actually house hacking
her house and I was paying for her mortgage and I was paying 260 dollars per week so my mortgage
repayments in 2016 was already lower than market rent because we were renting out the spare bedroom
fast forward to 2019 and this is when we live completely for free because the rent completely
covers the mortgage repayments and how we achieved this is that every year we save so much of our
income we don't buy a lot of things that we don't need we put it back into the house as a lump sum
payment and in 2019 only 160,000 of the principal loan was left and then the rent of 210 dollars per
week completely covers our mortgage repayments so yes we increased by ten dollars in 2017 and we've
never increased the rent ever since. For our mortgage repayments we pay both principal and interest
and we pay 722 dollars per month we also pay for home and content insurance and that's a hundred
and seventy dollars per month and we also pay for rates and that's 230 dollars per month and because
we rent out the spare bedroom we collect rent of 910 dollars per month to put this into a better
perspective because some people might think that 210 dollars per week rent is not a lot of money
but in a year that's 10,920 and because we've had our house for four and a half years
there's a total savings of almost fifty thousand dollars that goes straight towards the mortgage
repayments the rent that we charge our current flatmate is actually way under market value but
we still get 910 dollars per month and because of the rent that brings our total expenses down to
212 dollars per month and since I have a husband to share expenses with my out-of-pocket cost for
myself is 106 dollars per month or 24 dollars per week if you compare that to market rent in
our current neighborhood it's around 275 dollars per week for a single person for one bedroom and
because we've been house hacking this house since we bought it and we're now only paying 24 dollars per week
it is clear now that one of the benefits of house hacking is to drastically minimize your expenses
and save money but there's another benefit that's equally important and that's to use the money that
you've saved and reinvest it back into real estate and that's exactly what we did in 2019 we bought
another property and that's our rental property if you haven't seen that video yet i suggest you guys
check it out it's the empty house tour of our rental property in 2020 or 2021 we are actually
expanding our portfolio it's either we're going to buy another property or we're going to build
another house in one of our properties to some people watching this it may seem like the only
way to house hack is to first buy your property but there are actually other ways of doing this
i personally know of someone who rents out an entire house he lives in one bedroom and he rents
out the other two bedrooms and he's completely living rent free or you can rent out the other
bedrooms to airbnb because airbnb usually gets more income compared to traditional renting as
long as you have permission from your landlord to sub lease then you are saving tremendous amount of
money by house hacking this way although doing it this way doesn't really build wealth it only
saves you tremendous amounts of money you can use the money that you save towards a down deposit of
a first house and they say that millennials use 45% of their income towards rent and if you save
that 45% or reduce it significantly then you are so much more closer to buying your first property
I have first home buyers talk to me about buying real estate and the one thing that I always stress
to them is to rent out your spare bedroom because you pay your mortgage so much quicker this way and
also if you keep your spare bedroom you end up buying a lot of things that you don't need just
because you have the space to store it with that being said thank you guys so much for watching
this video if you want to see this two-bedroom house that we currently live in and how we live
below our means check out this video please subscribe to the channel if you haven't already
leave me a comment because i read every single one of them and i'll see you guys next week bye