House Hacking // What to Look for in Your First House

Over the past 10 years, Garrett and I have purchased 6 homes on our journey to become landlords, house-hackers, and early-retires. But we started out like many 20-somethings back in 2008, buying our first home in Seattle to build our life around.

the Dexter House renovation // front of house

The Wallingford House was an 1000sf fixer with 2 bedrooms, 1 bathroom and all of my heart. We bought the house for $445,000 and with only $12,000 down, our mortgage was over $3,000 a month. Eeek! Honestly, we had no business buying a home that expensive (and, in fact, that’s the most we’ve ever paid for a home). We had no cash reserves, no room in the budget for saving, and zero financial foresight. I’m pretty sure we even borrowed part of that $12,000 from our parents. But despite our ignorance, there were a few reasons why that home turned out to be a smart buy for us.

So today, with the benefit of hindsight from 10 years of purchasing, renovating, and renting out houses for financial gain, I wanted to share 7 things we would look for in a first home. Let’s pretend Garrett and I are first time homebuyers again, but this time with knowledge of house hacking and financial independence. This is the list we’d give our real estate agent of ‘must haves’. For reference, this list is specific to our experience, which is in a major urban city (Seattle) with high demand for rentals and a quickly-appreciating real estate market.

the Dexter House // adding back door

One // Fixer

Finding a home that needs work is number one on our list. We’re elbow-grease kind of folks and renovating can add equity into the property. Increasing the value of the house allows the owners to resell it for a profit, rent it out for increased monthly income, and/or refinance for better loan terms. In fact, that’s exactly what we did at the Wallingford House. After renovating the home and adding 2 more bedrooms and a bathroom, we increased the value enough to qualify for a standard 80/20 mortgage, which allowed us to remove the mortgage insurance, and eventually rent the home out. Like Thomas Edison said, opportunity comes “dressed in overalls and looks like work.”

Two // Price

Lots of financial-savvy people will tell you to buy a home that’s worth only half of what the bank qualifies you for. And while that’s smart advice, Garrett and I have never followed it. Ever since we started looking at homes as investments, we’ve used two rules of thumbs to determine what we’ll pay for a home. First, we have to rent out the home for the cost of the mortgage payment (principle, interest, taxes, and insurance). This is a safety net that means if things don’t go as planned (like for instance, a recession hits) we’re not losing our shirts every month. Second, we want the projected, post-renovation annual rent to be greater than 10% of the cash we have into the property. For example, if we bought a home for $300,000 and put $60,000 down and spent another $40,000 on renovations, we’d have $100,000 cash invested in the property. We’d have to net $833/month after expenses to make $10,000 per year or 10% on that cash, which would make the rent upwards of $2500/month. There are lots of other rules of thumb out there (I like the 1% rule too), but these have done well by us.

the Porch House renovation // dining room

Three // Old homes with Original character

This is a bit of a personal preference, but we like old homes. I keep a filter on Zillow and Redfin to search for homes built before 1950, thus making sure to see only the oldest of homes in our area. We do this for a few reasons. First, old homes with original character are inspiring, interesting, and unique. Second, old homes were built to last. They used real materials back then (no particle board) and were created by craftsmen. It would take a fortune to recreate some of the molding and built-ins that were standard to this vintage of home. I’m not saying we’ll never buy a home that’s newer than 1950, but that’s another rule of thumb we use.

the Dexter House renovation // backyard

Four // Location

This is a non-negotiable item on the list. We look for homes close to downtown, mass transit, and schools. And we make sure those homes are in safe neighborhoods that we would want to live in. Over the years we’ve found that properties that are close to parks, grocery stores, and restaurants/bars tend to always be desirable and thus a good long-term investment. Many of our homes are on busy streets too, which we’ve found make great rentals because they cost less to purchase and command similar rent to homes on less-busy streets.

Five // Unfinished square footage

Unfinished square footage – usually basements – can provide a nice equity bump when finished. Not all of our homes have had tall enough basements to finish, but we love it when they do. Finishing out a basement costs much less than adding on and can really increase the enjoyability and value of a home.

the Ravenna House // basement

Six // Zoning

If at all possible, look for a home with zoning potential. Could you convert the home to a duplex? Triplex? Add an apartment over the garage? It’s not always easy to predict what you’ll want to do with the property in the end, but having flexibility in the zoning is nice. The Wallingford House had a rentable backyard cottage, which was the only reason we felt comfortable buying a home that expensive in the first place.

Seven // Passion

We look for properties that we’re passionate about. That can be hard to quantify, but for us it often means lots of natural light, cool original details, and connection to the outdoors. But whatever floats your boat, the bottom line is that you should be excited about the home. Whatever you plan to do with the home – live in it, renovate it, rent it – properties are hard work and that work is much easier to do when you love what you’re working on!

The Porch House Renovation (featured on HGTV’s Master Plan)

The market has changed a lot in the decade since we bought our first house. But even so, these rules would drive our search today for a first home. I’d love to hear if you guys have any other criteria for buying homes or thoughts on these rules.

*disclosure: We use affiliate links.  If you make a purchase through one of the links, we may receive a small commission at no cost to you.  Affiliate links is one of the ways we keep this blog running, so thanks for supporting the Grit and Polish!

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Renting Out Your Home for a Weekend: the Nitty-Gritty details of Getting Your Home Ready

We get a lot of questions about how we prepare our home for weekend guests via AirBnb or HomeAway. Many people are considering doing the same, but are not quite sure how. Where do you put your clothes? Do you have to throw away all of your food? Do you actually meet these strangers or do you leave a key under the mat? We’re going to get into all of that today. Read on for how we prepare our Farmhouse for weekend guests.

Setting a Minimum Stay

Setting a minimum stay is easy to do on both Airbnb and HomeAway. We set a 2-night minimum at our Farmhouse, which makes the extensive preparation worth it for us.

Pro-tip: if you know you’ll be gone for a longer period, set a longer minimum stay to begin with. If your home doesn’t book, you can always shrink the minimum stay as the date gets closer. This is especially relevant for holidays like Christmas and Thanksgiving, where people often take longer vacations. 

Rate

We charge $350/night at our 4 bed/3 bath/2800sf Farmhouse, which seems to be a high enough price that we don’t get too many inquires (our goal is only one or two stays per month) but people still book it. Deciding on a price is all about making the effort worth it for you.

Pro-tip: To set your rate, look at comparable listings and hotel rates in your area. Then adjust up or down based on factors like number of beds, amenities, season, and condition of your home. 

Check-In

Welcoming your guests can either be done in person or with a lock-box/hidden-key. We have a lock-box at every property (we use this one) but like to meet guests when at all possible. We also leave an information with details including check-out instructions, what to do with dirty linens and trash, internet login, how to work the TV, instructions for using heat and cooling, etc.

Pro tip: leave a lock box near your front door with a key and an instructions sheet inside the home. And, if at all possible, meet your guests in person so they know they’re renting from real people!

Cleaning

Of course you want a clean home for your guests to enjoy (heck, you want to enjoy a clean home too). But that doesn’t mean you have to launch into a Spring clean before each guest arrives. Tidy up and deal with your personal items (more on that below) and then focus your cleaning efforts on the bathrooms, kitchen, floors, and windows. We also like to stage our home with pillows, throws, flowers, books, and games so that it looks extra inviting.

Pro Tip: hair is your number one enemy. Make sure all evidence of mammalian inhabitants (aka hair) is gone from the house before welcoming guests.

Bedroom Storage

This seems to be a hot topic for readers – what to do with your clothes? When we’re renting out our primary residence for a weekend, we close off our closets, but leave the dressers in the kids’ rooms as is. The bedrooms in the Farmhouse are well appointed but not overly-personal and we make sure that there’s a surface for guests to put luggage on in each room. That could be a chair in the corner, a dresser top, or a luggage rack (we use these).

Expectation of Privacy

I’ve been asked a lot about our ‘underwear drawers’, so wanted to address that despite the fact that our underwear drawers are closed off in our closet. There’s an expectation of privacy that goes along with renting out a home. We expect guests to respect reasonable boundaries and behave like responsible adults. And they expect the same of us. If a guest rifles through my underwear, I’d be a little ‘ikked out’ but mostly just sad for the guest. It doesn’t matter if a stranger knows the color of my underwear but it does matter if a person has made it to adulthood and hasn’t learned about boundaries. Ya know? And on that note, Garrett and I have long gotten over the ‘there’s-a-stranger-in-my-home feeling. We’ve been landlords for 10 years and learned to appreciate the cool people we have met along the way and thank the holy heavens that we aren’t rude or unpleasant like the worst guests we’ve had.

Beds

We put waterproof mattress covers over each mattress and pillow (we love these foam mattresses, these pillow covers, and these mattress protectors) before making the bed. We actually use the covers when we’re at home too and throw them in the wash when they need it. In terms of linens, I keep 2 sets of sheets for each bed at the house and put one on for guests and make sure the second set is washed and ready for our return. We don’t have one dedicated set for guests, just whichever is up on the laundry cycle.

Pro tip: Have a clean set of sheets and towels ready for your arrival so you can quickly get settled.  

Office and Personal Documents

We leave our office desk cleared off for guests, in case they have work to do. We also have one set of drawers in the office that’s lockable, which is where we leave our office and business supplies. All of our personal documents – like passports, birth certificates, etc – go into a fire-proof safe, which we bought years ago in case of a home fire.

Tip: lock up personal documents and valuables in a fire-proof safe. It will do double duty protecting your things in case of fire. 

Bathrooms

We move personal items like tooth brushes, lotions, etc into a closet and leave towels, soaps, and shampoo out for guests. In the kids bathroom, we keep a basket on a top shelf with all of their things in it when we’re away.

Kids Toys

In general we keep kids toys put away in their bins (or a closet) when guests arrive. But, if you know kids are coming, it always nice to leave out a couple baskets of appropriate-aged toys. We keep the majority of our book collection in the living room, open for everyone, and leave a smaller box in the kid’s rooms.

Pro-tip: if you know kids are coming, leave them some age-appropriate toys and books.

Valuables

Honestly, we don’t have a lot of valuables. No expensive jewelry to lock away or anything like that, but if we did, I’d put it in the safe.

Conveniences and Other Nicities to Leave Out

We like to make available the following items for guests: cell phone chargers, books, games, coffee, shampoos, soap, and toys. We also try to leave a bottle of local wine or a bar of local chocolate for guests. Anything to make them feel welcome will help them enjoy their stay and in turn, give you a better review.

Kitchen

For short stays, we like to leave the kitchen countertops clean and clear. Our food stays in the pantry cabinet but we clean the refrigerator, tidy up our food, and make leave at least two shelves for guests. Our kitchen gets a TON of use every day (we are basically home full time with 3 young kids) so this is probably the biggest task in getting our home ready for guests.

Insurance

Both Airbnb and HomeAway have policies that cover up to $1,000,000.

That’s everything we do to prepare our home for weekend stays, but let me know if you have any more questions. I’d like this post to be a real resource so I’ll update it if more questions come in.

Sources

Farmhouse sources available here

Related Links

3 Reasons to Rent Your Home out for a Weekend / House Hacking to Financial Independence (our story via Minimalist Mom)

*disclosure: We use affiliate links.  If you make a purchase through one of the links, we may receive a small commission at no cost to you.  Affiliate links is one of the ways we keep this blog running, so thanks for supporting the Grit and Polish!

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House Hacking // 3 Reasons to Rent out Your Home for a Weekend

During the One Room Challenge, I mentioned that we are renting out the Farmhouse this summer for a few weekends as a vacation rental.  As the Farmhouse has added bookings, we have scheduled weekends of camping and family visits, which we’re all looking forward to. But when I’ve shared our summer plans with friends, I’ve gotten some questioning glances. So I thought it would be helpful to outline a few of the reasons we like to house hack our primary residence here today.

As long-time followers of the Grit and Polish already know, house hacking (i.e. getting others to pay part or all of your rent/mortgage) is our M.O. We’ve been doing it for 10 years and I truly doubt we’ll ever stop. House hacking has set us on a path to owning 5 homes, retiring at the age of 34, and living a pretty fantastic life all around. Low-fee sites like Airbnb and HomeAway have made renting out your home for a weekend (or longer) easy, and I’m guessing some of you may be considering it too. So today I wanted to share 3 of the reasons we decided to rent out our primary residence for short stays this summer.

One // Get paid to go on vacation.

Let me repeat that: get paid to go on vacation!  Most of us don’t need another reason to take a trip, but if you did, having someone else subsidize your adventure is pretty compelling.  So far we have reserved a campsite on the San Juan Islands and scheduled a longer visit to my sister’s house during summer bookings. We’re all much more excited about those trips than we would be spending another weekend at home. And a couple of winters ago, we did a longer 2 week booking when we lived at the Dexter House. We got to spend that time in the country at my in-laws house, relaxing and having one of my favorite Christmases ever, while earning thousands of dollars. Not too shabby.

Two // Less clutter

It’s easy to let stuff creep into your life. A few extra toy baskets here, a couple cast-off bins of old books there and suddenly you’re making space for things you don’t really have space for. Stuff seems to attract other stuff in my experience.  And it’s a slippery slope that can leave your home feeling cluttered if you’re not careful. For us, the best way to fight the slow creep of stuff is to invite others into our home. There is no better reason to keep your living spaces tidy and clean than inviting others to share those spaces with you. So host a party, invite a house guest, or better yet, rent your home out for a long weekend.

Three // Earn a financial return on your effort

This is a big one for us. We all spend time maintaining our properties (a lot of time if you live on a 3 acre old farm like us) and you probably spend money furnishing and decorating them too. So why not earn some money on all that time and effort? Renting your home out for a weekend or a month essentially turns chores into an investment. And that shift in thinking to a landlord/real-estate-investor perspective can help some (read: my husband) enjoy a home that might otherwise feel a bit like a ball-and-chain.

 

photos of Our Farmhouse // entry / master bedroom (and here) / officeBoys bedroom / master bathroom

Getting your home ready for guests is a whole separate topic that I won’t go into here, but I will say that in the past 4 years of hosting on Airbnb (including 2 of our homes in Seattle on a full-time basis), we’ve only had a handful of finicky, unpleasant guests and even fewer super messy/disrespectful guests. Have you ever rented out your primary residence? Would you ever? We’d love to hear why or how you house hack! Leave a comment and keep the conversation going.

Related Links

Our Farmhouse page and sources // Our story: Early Retirement and Old Houses //

*Disclosure: we use affiliate links.  If you make a purchase through one of our links, we may receive a small commission at no cost to you.  Affiliate links is one of the ways we keep this site running, so thanks for supporting the Grit and Polish!

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