Why Your ‘Dream Home’ Might Be a Duplex: The House Hacking Strategy

We are sold a very specific version of the American Dream. It involves a white picket fence, a sprawling lawn, a two-car garage, and a 30-year mortgage that you pay, by yourself, every single month until you are 65.

That dream is fine. But for the How To Live 30 generation, we are interested in a different dream: Financial Freedom.

What if your first home didn’t just cost you money? What if it paid you? This is the concept of House Hacking, and it is the single most powerful tool for millennials looking to enter the real estate market.

As a Realtor on the Space Coast, I help investors find these properties all the time. But you don’t need to be a “shark” to do this. You just need to be willing to live a little differently for a few years.

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What is House Hacking?

House Hacking is buying a multi-unit property (Duplex, Triplex, or Fourplex), living in one unit, and renting out the others. Because you live there, it qualifies as a “primary residence,” which unlocks incredible financing options.

The Magic of the FHA Loan:

If you buy a rental property as an investment, the bank usually wants 20-25% down. On a $400,000 property, that is $100,000 cash. Most of us don’t have that lying around.

But if you live there, you can use an FHA loan with only 3.5% down. That’s only $14,000. Suddenly, the game is accessible.

Let’s Run the Numbers (A Real World Example)

Let’s say we find a Duplex in Palm Bay or Titusville for $380,000.

• Your Mortgage (PITI): Roughly $2,600/month (depending on rates).
• Rent from Unit B: You rent the other side for $1,600/month.
• Your “Rent”: $2,600 – $1,600 = $1,000/month.

You are now living in a 2-bedroom home for $1,000 a month. But wait, it gets better. You are also:

1. Paying down principal: Every month, your net worth increases.
2. Getting Tax Benefits: You can depreciate the rented half of the structure.
3. Appreciation: The property value goes up over time (especially in our booming Space Coast market).

The “ADU” Loophole (House Hacking Lite)

Maybe you say, “Lizzie, I don’t want to share a wall with a tenant.” I get it.

You can “House Hack” a single-family home if it has an Accessory Dwelling Unit (ADU). This is a fancy word for a Mother-in-Law suite, a garage apartment, or a detached guesthouse.

We see a lot of these in the older beachside neighborhoods. You live in the main house. You Airbnb the guesthouse to tourists or traveling nurses (we have major hospitals here). Often, Airbnb income can double what long-term rent brings in.

The Exit Strategy

The best part of this strategy is the exit. You don’t have to live there forever.

You live there for one year (the requirement for the loan). Then, you move out. You buy your actual “Dream Home” with the picket fence. You keep the duplex and rent out your unit.

Now, the duplex is a fully cash-flowing asset that pays you $500+ a month in profit, and you didn’t have to put 20% down to get it.

The Mindset: Delayed Gratification

House Hacking isn’t the glamorous option. You might have to deal with a leaky faucet next door. You might not have the granite countertops immediately.

But in your 30s, we are playing the long game. We are building the foundation so that in our 40s, we are untouchable. If you are willing to sacrifice a little comfort now for massive equity later, this is the path.

Let’s go find you a duplex.