House Hacking a Duplex Can:

  • Lower Your Cost of Living

  • Fast-track Your Equity Growth

  • Produce Positive Cash-flow

What is House Hacking?

House hacking is when you use your primary residence to generate income. A house hacker typically purchases a multi-family property—a duplex, triplex, or fourplex—and lives in one unit while renting the other(s).

House hacking is powerful because you are purchasing an income stream along with a primary place to live, which allows you to lower your cost of living, fast-track your equity growth, and have the potential to produce positive cash flow.

Live in One Unit and
Rent the Other.

A superior duplex in a trending location allows you, the owner/investor, to receive two (2) financial returns on your real estate investment—Annual Return and Equity Return.

1 - Annual Return

You receive a monthly income during the rental period.

RENTER PAYS YOUR EXPENSES

Your renter(s) are paying off your mortgage, property taxes, insurance, and expenses while providing you with an upfront positive cash flow.

TAX SAVINGS DEPRECIATION

You can depreciate the rented portion of the duplex over 27.5 years (approximately 3.25% of half of the purchase price), resulting in a cash-free tax deduction. Take the duplex purchase price, excluding the land, divide it in half for the rented unit, then divide that amount by 27.5 to get an annual depreciation deduction.

DEPRECIATION
EXAMPLE

You purchase a duplex for 669,000 on $150,000 worth of land. You can depreciate $259,500 and write off $9,436 annually for 27 years. You also have the opportunity to deduct 100% of interest, taxes, HOA dues, maintenance, and fees related to the rented unit.

2 - Equity Return

Whether you sell, perform a 1031 tax-free exchange, or execute a cash-out refinance, your gross equity will be returned in three (3) ways:

1. ASSET APPRECIATION

Houston has a track record of being one of the best long-term real estate investments in the U.S. According to NeighborhoodScout data, appreciation rates for homes in Houston have been tracking above average for the last decade.

The cumulative appreciation rate over the previous ten years has been 98.71%, which ranks in the top 30% nationwide. This equates to an annual average appreciation rate of 7.11% for Houston.

Based on the Zillow Home Value Index, Houston home values have appreciated by 4.2% in the last twelve months.

2. PRINCIPAL REDUCTION

Your tenant(s) make monthly rent payments that cover the mortgage payment, which ultimately reduces the amount of principal due on the loan. Over time, the principal decreases while the equity increases.

3. RECOUP DOWN PAYMENT

IRecapture your initial upfront cash requirement.

Ready to Get Started?

Click below to see available duplexes for sale.

Already Have a Lot?

No problem, we’re happy to discuss building one of our plans on a lot you own. Please note we focus our building efforts within a 5-8 mile radius of downtown Houston.