House Hacking by Living in Our Duplex

House Hacking by Living in Our DuplexEarlier this year, we moved into our investment duplex. We purchased this duplex in 2014 and planned to move into it at some point. In February, one of our tenants moved out so we executed our plan. It was getting more expensive to live in our condo anyway. The property tax and HOA fees kept increasing every year. Also, the duplex is in a great neighborhood and it has a backyard. RB40Jr and his friends used it quite a bit since we moved in so that part worked out exactly as planned.

The financial side has been great too. Our housing expense dropped about 50% since we moved. Housing is the biggest expense in an average household budget. It’s a big win if you can reduce it. Today, I’ll share the pros and cons of living in an owner occupied duplex.

Pros of living in our duplex

Many expenses are halved

It’s expensive to own a home. The mortgage isn’t the only bill homeowners have. You have to pay property tax, insurance, repair, maintenance, utilities, landscaping, and more. Living in an owner-occupied duplex is very helpful financially. I can deduct 50% of these expenses against the rental income.

  • Shared utilities – water and trash.
  • Shared appliances – washer and dryer.
  • Exterior maintenance – paint, gutter, roof, deck, and landscaping.
  • Insurance, property tax, and mortgage interest. (I’ll have to double check these when I do tax next year.)

All these helped reduce our housing expense significantly. The mortgage at our duplex is also a little smaller. That helped too.

Passive income

Now that we’re down to one rental unit, we make about $250/month in passive income from our tenant. That’s not a lot, but it is way better than nothing. We’ll also save about $1,200/month by living in a duplex instead of our old condo. These two add up to almost $1,500 per month. That’s a big swing.

Learn to be a landlord

Living in an owner-occupied duplex is a great way to learn to be a landlord. Real estate investing is a proven way to build wealth. However, most people don’t know if they can handle being a landlord. Living in an owner-occupied duplex is the easiest way to try it out. It’s not much more work than owning a single family home. The only big difference is that you’ll have to manage one tenant. If this is too hard, then you will know that rental investing isn’t right for you.

Less down payment

Usually, investors need to come up with 25% down payment for a rental property. However, the down payment can be much lower if you live in a unit. The FHA guideline allows you to buy 2-4 plexes with as little as 3.5% down. If you don’t qualify for an FHA loan, then you’ll have to go with the conventional mortgage. You’ll have to check with the bank, but I believe the minimum down payment is 15% for an owner occupied duplex.

Easier repair and maintenance

Repair and maintenance are way easier when you live onsite. Our old condo was just a few miles away, but it was always a pain to work on anything at the duplex. I’d forget to bring a tool or the keys and had to go back home to get them. Last week, I fixed our sidewalk and got it done relatively quickly. I checked on it occasionally and it turned out okay. It would have been very annoying to come by a few times throughout the day to check on the concrete. It’s just easier to work on repairs now that I live here.

sidewalk repair

A corner of the sidewalk cracked and sunk. It was a tripping hazard so I fixed it.


The duplex gives us a lot of flexibility. Currently, we live in one unit and rent out the other one. We could take over both units when our son is older and needs more space. Once he’s off to college, we could rent the other unit out again or put it on Airbnb. I think this is better than buying a bigger home and then downsize to a small home as the family situation change. Real estate transactions cost a ridiculous amount of money. It’s best to avoid moving if you can.

Cons of living in your duplex

Of course, there are some cons too. Nothing is 100% positive, right?

Shared housing

The biggest issue with living in a duplex is sharing the space. We share the basement, laundry area, and the yard. It isn’t a big deal to us because we lived in a condo before moving here. We had to share the common area there too. However, it might be tougher if you come from an SFH.

Also, our tenant lives in the upstairs unit. Luckily, he’s a relatively quiet person. We hear him walking around, but he doesn’t watch much TV or listen to loud music.

Working with a tenant

Our long-time tenant is awesome. He’s a very nice guy, not too noisy, and he has a secure job. To top it off, his girlfriend lives in Europe so she’s rarely here. Basically, he’s the tenant from heaven.

However, even the best tenant needs a little managing. For example, I had to remind him to change the address for the rent payment to our new address. Also, we worked on clearing out the basement a bit when we moved in. It was getting crowded with junks. Lastly, his balcony door rotted out and water was seeping in. He didn’t mention it until I notice a leak downstairs. Tenants just don’t pay attention to these issues. I’m not complaining at all. Our tenant is great, but it’s just easier when you only have to deal with your family.

Oh, I almost forgot. We had to watch ourselves more in a duplex. Occasionally, I get mad at my son and yell at him. Now, I feel I have to keep it down so our tenant doesn’t think we’re dysfunctional. I guess that’s a good thing.

A duplex can be hard to find

It can be hard to find a multiplex in the right location. When we lived in the suburb, I wanted to buy a duplex, but couldn’t find anything near my old work. There weren’t many multiplexes in the cookie cutter suburb. There were a few, but they were all on the wrong side of the track. Those areas served low-income families and they usually have more problems.

Fortunately, our current duplex is in an urban area and it’s a great location. IMO, it’s really hard to find the right multiplex in the suburb. I assume they are pretty much nonexistent in the rural area. There is more availability in dense urban areas. Even then, it’s harder to find than a condo or an SFH.

House hacking by living in a duplex

All in all, I think living in an owner-occupied duplex is a great way to reduce housing expense. Housing expense is so high on the west coast now. The median home value in Portland is over $425,000. This is cheap for a big city on the west coast. The median price of a home in Seattle is almost twice that. Forget about owning a home if you live in San Francisco. The median price of a home there is over $1.6 million. That’s crazy.

One way to reduce the pain is to live in an owner occupied duplex. It’s working out very well for us so far. This is what I should have done when I first moved to Portland in 1996. Oh well, that’s life. We make mistakes and learn along the way.

Okay, it’s your turn. Is housing expense your biggest monthly expenditure? What do you think about living in a duplex to reduce housing expense?

If you don’t want to be a landlord, you can still invest in real estate. REITs have done extremely well over the last decade. You can invest in them through your brokerage. Alternatively, you can try real estate crowdfunding. It’s a new way to invest, therefore riskier than being a DIY landlord. However, it’s a lot more passive. You can read more about my real estate crowdfunding investment here.

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