How My First House Hack Helped Me Pay Off My Student Loans

“Payment processed. Balance: $0.00.”

I clicked “refresh” on my browser. The same message was STILL in my inbox. In disbelief, I signed in and out of my email to make sure this wasn’t some cruel joke. 

The tenth time I logged into my account, it finally hit me: I’d just paid off my student loans.

It felt like taking a deep breath after being held underwater. After all, I wasn’t exactly rolling in the dough with my $3,000 a month after-tax teaching salary living in one of the most expensive states in the country: Massachusetts. For six long years, I’d been paying the minimum on my $35,000 student loan balance and dreading the imminent withdrawal from my bank account on the first of the month. Now, that burden was lifted. All because of one decision I made…

House hacking is when you turn your biggest expense and liability into an asset. That can mean renting it out, renovating it, or both. Experiencing the power of house hacking firsthand, I’m sharing my story to show you what’s possible. Here’s how my first house hack in 2017 paid off my student loans.

After about 20 home tours, I finally found a winner. Prior to this, every house was either at the very top of my budget or grounds for a bidding war. I couldn’t compete, so I switched my thinking: buy the ugliest house in the best neighborhood I could afford.

As the front door opened, I was immediately punched in the face. 

Well, not literally. 

It was the pungent smell of mouse droppings among some other fun scents you’d expect to find at a dump, not in a 1,900 square foot 3-bed,1.5-bath house in a B+ neighborhood.

To me, it also smelled like opportunity. 

I knew that many buyers were probably deterred by the smell and couldn’t look past it. If it wasn’t that, it could’ve been a number of things…the dark red dining room with a mounted deer head, orange living room, paint-stained floors, all-dirt second driveway, or perhaps the unusable above-ground pool with its own microbiome of God knows what growing in it.

I was confident that there wasn't any potential competition since the house had been on the market for two months. I also knew, as unsightly as it was, the house only needed cosmetic repairs–nothing structural.

Once I saw the house, I moved fast. I got the house for $28,000 below asking AND received $8,000 in closing credits. Here’s how it played out:

Renovating a house is not as easy as Chip and Joanna Gaines make it look…especially on a tight budget.

And if I’m being honest, calling it a “budget” is generous. That would imply I had a plan and money allocated to each item – I didn’t. I simply made a list of low cost, high ROI changes that I could make and completed them in phases as I scrounged up enough money to do them.

All in, I spent $12,000 on renovations. 

1. Deep clean: Luckily, I didn’t inherit any rodent tenants. The sellers had paid for an exterminator to “evict” them. They left plenty of parting gifts, though. For about a week, I convinced my friends and family to scrub and scrape every surface area imaginable. All it cost me was time and whatever cleaning supplies went for at the time.

2. Paint: Paint has the ability to completely transform a space without breaking the bank. I spent about $2,500 to repaint the entire inside of the house, which is like a billion dollars in paint money. 

Over the course of three painstaking days, I painted every room in the house multiple times. You wouldn’t believe how many coats of paint it takes to turn a dark red wall beige! 

In case you’re wondering… it took four.

3. Flooring: Remember those ugly, paint-stained floors? I hired someone to sand and refurbish the hardwood for $3,500. 

4. Landscaping: My backyard looked like a baseball diamond. Think less Fenway Park and more The Sandlot. Oh, and there was a massive above-ground pool and deck. I got rid of the pool and deck for free on Facebook Marketplace, then spent about $1,000 turning the dirt into grass and adding a few pieces of fencing for privacy.

5. Kitchen: I gave the kitchen a facelift for about $5,000 without doing a full remodel. I sanded and painted the cabinets, added new hardware, replaced the sink and fixtures, installed a stick-on backsplash and granite countertops, and swapped out the hot plate setup for a real stove.

Two years after buying, it was time to sell.

Under IRS Section 121, you can exclude capital gains on the sale of a primary residence if you’ve lived in it for at least two of the last five years. Translation: I could sell without paying taxes on the improvements I’d poured into the place.

Including my commission check from being the list agent, I walked away with a little less than $50,000 at the closing table. Here’s the breakdown:

After all was said and done, my student loans were paid off and I still had money in the bank for my next house hack. For me, this experience completely changed the trajectory of my life.

What’s one uncomfortable, weird, or unconventional thing you’ve done to get ahead in real estate? Hit reply and let me know!