Luxury House Hacking: How to Live in a Million-Dollar Home for Cheap

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So a lot of people are wondering, how can I afford to live in a multi million dollar home without paying a fortune? Better yet, how do I live in luxury for free? Did you know that the average homeowner is overpaying by tens of thousands of dollars per year simply because they don't understand how to le their property correctly? The real estate market follows predictable trends, appreciation, depreciation, and most importantly, demand. The ultra wealthy don't just buy homes, they turn them into assets. So why can't you? Here's the hack. Luxury house hacking. Instead of paying full price for your dream home, you can leverage short term rentals, corporate leases, even other house hacking strategies like co living to reduce or even eliminate your mortgage payment or in some cases your rent payment. So, so we're going to break this down both for rent and for buy, you know, depending on where you are in your stage of life. I personally have a few examples here of what I've done in the past and I'm going to utilize them here and explain them for you depending on what stage of life you were on. Now when I was in my younger days, and this is great for like a college kid or if you're living a bachelor life, you know, for me I was living in a big city at the time and the average rent for a studio or, or a one bedroom in that city was in the vicinity of two to three thousand dollars a month for something reasonable. Right. And so every market's different, but in my specific scenario that's what it was at the time. Now there was something that I was thinking about at the time where I was like, man, how can I live in these excellent homes but pay the same price or better? And one of the things that I thought about is like, you know, what are the things that I'm going to really think about and care about over the next 10, 15 years of my life? And what do I know happens if I get in an environment with other people that are minded, you know, because generally you are a product of the five people you spend the most time with. So I set out to find five people that I could live with that shared same values, that we could grow together, invest together and happen to find other entrepreneurs that I really enjoyed living and that we had similar ideologies. And then ultimately, you know, we found a 7,000 square foot home in the best part of the city. We were living by all the well known people in the city and, and it was an excellent place where we had a ton of different people and one of the most epic fun times in my entire life. Now I wasn't ready to buy at this time and so I decided to rent. So here was the math. The average rent at that time was two to $3,000 for a one bedroom in a, in a comparable scenario. And that probably got you about 1,000 square feet.

Our home we rented for $11,000 actually was $11,500 and it was a six bedroom home.

Had an elevator, had all this stuff and was about 7,500 square feet.

My cost to live here, depending on what room, and that's how we split it up, the cost of the room, the bigger the room, the higher the rent was approximately $1,500 because I actually had one of the smaller rooms. So I actually saved about 500 to $1,000 on my rent and I got to live in this home that at the time was about a $2.2 million home. And it's definitely way more today for today's real estate prices. And I lived there for five years with five epic people where we were able to invest in things together, grow together and had an excellent time. It was one of the best times of my life. So if you are in the early part of your life and you are not ready to buy a home, I would highly encourage you to find the strategy. It's really important that you just don't pick random roommates. And because you know if they don't share the same values with you, you know one of them leaves randomly, you're going to be on the hook for that rent. That is a risk that you undertake. And then we had to also convince the landlord to rent to us. We had to pay a certain amount up front and had double the security deposit because he saw, hey, why do I want to rent this amazing home to a bunch of 20 year olds? But you can get past that. It's very possible. We've done it a few times and so that's what I would encourage you to do if you are in that situation. Another opportunity here is actually renting a home in a later stage of your life. So there are many homes to rent depending on, you know, where you're at. Sometimes a landlord has a multifamily home, which means that there's two units inside of a home and both maybe they're both empty. So sometimes they rather actually Rent that out to you because you may want the other one as an office or something. But you can also sometimes get permission to rent that unit out. So in this example, whether it's a single family home or a rental home, what you can do in the later stage of your life is very similar we can do in the buying. So if you can find a single family home that maybe has a detached room, a mother in law suite, a casita, and they has a dock, a pool, any of these other things that may come with the home, you can actually rent out that, that third party unit. So if you're paying $3,000 for rent in the single home, say you're in like a suburb or you're in a city or a suburb of a city, sorry, and, and there's a detached home, you might be able to rent that casita out for 1,000 or $2,000 a month on Airbnb. And then essentially it brings down your rent to $1,000 a month. Right. Depending on how busy it is. If you're in a very busy area, you're in the Sunbelt, you're in a place that has a lot of tourists, you know, especially during conference seasons, whether you're in Austin, things of that nature, you can actually potentially break even on this and not pay anything. You live for free, right. And in this case, you just have to get the landlord's permission and oftentimes they will actually grant it for you if you're living in there. And this doesn't make it like all weird and awkward. If you have a detached mother in law suite, you can also just rent the room. But that's really up to you if that's what's right for you. But that's how what you could do if you're in later stage of your life, you don't have roommates, you maybe have a family and stuff, you can rent that out and make that income. Now, if you're ready to buy and you're buying, like right now is an interesting time because we are seeing, you know, while interest rates are quite high, there's a lot of inventory coming on the market for homes and things aren't moving as fast as they were during the COVID era. So a lot of people are considering, considering to buy. Last year there was a lot of changes also to the loans that you can get. You know, you can now buy a multifamily unit, which is basically a multifamily home, is a home that has two to four units inside a home. It's one dwelling, but all the units are separated and this is one of the best ways to grow wealth. If you don't have a lot of money, this is like the best way actually probably if you're considering to buy a unit. And the reason being is that these loans you can bid anywhere from 3 to 5% down. Meaning if a property cost a million dollars, you only need 30 to $50,000 to put down on that, which is a tremendously low payment. Now why does this work and how are you able to afford? You may think, wow, a million bucks is a lot. If you're only making $50,000, $60,000 a year, a million dollars is a tremendous amount. How am I going to get approved for that loan? Well the way that the banks approve these types of loans is that they think about the rentable income of each of the units. So say you found a $1 million dollar four bedroom unit.

And each, or sorry, a four, not four bedroom, sorry, four unit, $1 million dollar four unit multifamily. And the average rent in that area for you is let's say $2,000, right? So the maximum rent if you rented out all of them is $8,000.

Now depending on your mortgage payment and all this stuff, you can rent out three of those, right? Because you're going to live in one of them, right? So you live in one.

And in many cases to get this low of an interest rate, you need to live in one that is like usually the rule for at least one year, then you could resell it and do this again. This is how a lot of people build wealth if they're just getting started out. And so basically you're paying, you can rent the other three out for $6,000. Say that your mortgage payment is $6,000. And so basically you are living in this multifamily unit for free, right? Because your rent is free and you get to depreciate the asset as a business because essentially you, you know, any interest that you're getting, any costs associated that unit go against your taxes. So you're not going to pay any taxes. And you can also utilize depreciation, you can lose a bunch of tax things to benefit. So this is one of the best ways to actually buy a multi million dollar property or even several hundred thousand dollar property depending where you're in the country and live for free. And that's something I would highly encourage people to look into given these rules that are now changing with Fannie and Freddie Mac for these loans. And they want a lot of first time home buyers are Trying to spur the economy right now, especially with real estate. So right now is a really good time to do that. And you know, March of 2025, where we are now, now, if you don't want to do the multifamily route, there's a lot of opportunities in single family homes too. What I generally look for in a single family home, if I'm considering, you know, if you're considering buying a multifamily home and what I would be interested in, if this is what the strategy that you want to undertake is, you want to look for properties that have additional assets associated with them. So if you're in a city like Miami, right, there's a lot of detached mother in law suites, casitas, places that basically, it wouldn't bother you to essentially have someone stay there because it's basically they have their own area. You have your own area. There are some people that even convert a portion of their home to have its own entrance and have its own little micro kitchen in there just to rent out that unit, whether it's a long term or a short term rental, like in an Airbnb. But if you're essentially paying, you know, $6,000 on a multifamily or on a single family home and you could rent out and you're in a popular city, you could potentially bring in $3,000 in a single family home. If you're living on the lake or on the water, people Pay, can pay $1,000 for a dock. You know, it just, it just depends on like where it is. You can even rent out your pool. A lot of people don't know this, but I read this whole story of this guy that was making $150,000 a year just by renting out his pool to pool parties. You know, the same thing with being creative. You know, if you have a lot of acreage, you can put like these tiny homes on there, rent them out, have a boutique resort. A lot of people are doing that these days. And there's a lot of opportunities for these types of things. It depends how much hassle you want, right? But these are really interesting opportunities to basically bring in income. You also are going to get a bunch of write offs because it kind of turns into a business opportunity at that point in time too, which, which will save you taxes. So this is a way to kind of luxury house hack or how to house hack just in general. And it even applies into that luxury category as well. What if I told you that living in a luxury home could actually be cheaper than renting a basic apartment. The difference isn't what you pay, it's how you structure your investment. The rich don't just buy homes, they turn them into cash flowing assets.