First house catastrophe
Buying your first home could be a devastating event
Is that a different POV then what you’re accustomed to?
I know it was for me.
Go to college, get a job, buy a house, have a family and live happily ever after.
No one told us that in order to go to college, we’d have to go into a massive amount of debt that needs to be paid back. (For most)
No one told us that a job wouldn’t be guaranteed – how many people got a degree and their life work is something else?
Buy a house, no one told us that we’re tying ourselves down for the next 30 years forced (by choice) to make the mortgage payments for 360 consecutive months (we’ll come back to this.)
Have a family, no one told us how to find that person, let alone how much work it takes to keep that relationship going.
And finally live happily ever after, right? With financial constraints and a toxic relationship..
The divorce rate for America is over 50%.
Rant over – why is buying our first house a catastrophe?
SImply put, it’s a liability. It’s taking money out of our pockets each month (the mortgage)
(Let alone taking our time away from us with maintenance and repairs)
The average mortgage is just around 1,000$ a month…
(did you know mortgage means pledge until death?)
Now you have to work more to make that extra 1,000$ a month, or take a pay cut on your lifestyle to fund that mortgage each month…
If it’s the later option, we’ll be losing $12,000 a year in savings (bc it’s going to the mortgage)
What if we want to become financially free? Financially independent so we don’t have to depend on work..
So when things hit the fan, we have a safety net to fall back on?
That’s where the other strategy comes into play…
It’s called “house hacking.” (Coined by BP?)
A simple example is instead of buying a single family home where you solely have to cover the mortgage each month, buy a duplex.
You’ll have to put the same percent down for a duplex as you would a single family.
Rent the other half of the duplex out, live in the other unit.
You just wiped out your mortgage payment of 1,000$ a month → 12,000$ a year.
Plus your gaining equity each month because the mortgage is still getting paid.
Plus a thousand other benefits…
What if you did this once a year?
That’s a minimum of 2 units a year…
10 years later that’s 20 units?
You’re not even doing anything different with your life…
Just being a little smarter than most
And a little smarter each day will [eventually] lead to a drastically different life within a couple of years.
It’s important to note that this is a 500 foot overview of this house hacking thing.
I love talking about Real Estate and Financial Independence, reach out and let’s chat.