I house hack. It's what makes me FIRE instead of an unemployed dude running out of money.
I like the term house hack. I could have sworn lots of people on this forum use it. This forum is where I first heard the term, IIRC. I agree with
@tralfamadorian that it means anything you do cut housing costs that a normal consumer sucka wouldn't do. I would give plus points for layering several techniques to the point of getting extraordinary results, but anything that cuts costs significantly will do in my book. For what it's worth, I count your choice of net cost or cash cost as a legitimate measure of "cost" and "results". To me the term is about crafting a solution you like even if it looks bad to others. I guess I extend that logic to the term itself. :)
I've been house hacking since the 1990s. I estimate my gains at over a quarter of a million dollars, meaning that house hacking produced over half my stash.
Bought a house with 5% down in a cheap city where rents looked to be more than the cost of ownership. Specifically bought a 3 bedroom house with a "family room" that I planned to use as a 4th bedroom to maximize roomie rents. Specifically bought it partly on the guess that being in a minority neighborhood meant more house for the money in exchange for less status. The structure was estimated at $64k by insurance company so I got paid $19k to take a piece of land in the poor part of town. $45k cost (market price) but FSBO purchase. The owners had moved out and were renting it out at first. I originally rented a room in it, then kept paying my $175 room rent for nine months while the owners tried to sell the house themselves. Seller's wife got a real estate license to increase their profit on the deal but failed to make the sale because they asked $51k when market was $45k. The other roommates left when the house went on the market, I just stayed and waited, enjoying having a cheap house all to myself. I think that phase was house hacking before the term was invented. Eventually they sold to me for $45k.
Rented out the rest of the rooms, was cash flow positive immediately ($720 rent, $450 PI...not sure what tax was back then, but insurance maybe 40-50/month). Did no upgrades and had very few repair costs for a long time. Got lucky when plumbing broke and hail damaged the roof, because insurance paid for both. Replaced the AC once. That was the only large repair cost I paid for during the first couple of decades!
Over time, I received probably more than $160,000 of rent. The house itself appreciated about $300,000. I paid some mortgage and repair expenses, but even after accounting for inflation and the appreciation that the expense money would have had in the stock market, I am pretty sure that I'm ahead by over $250,000 in today's dollars.
With taxes and other expenses having increased faster than rent, I think that going forwards I am roughly breaking even compared to the net cost I'd have if I just rented a room in a similar house (which would now be about $500/mo ABP). I'll be cash flow negative temporarily sometime soon when I finally do some upgrades, but expect to be breaking even if I stay in the house and average out the the cost over time. Some more details about current house effect on FIRE are my journal. Financially, the house hacking has been a nice ride for me.
