Rails Basic

Introduction

Overview

Placeholder biography for House Hacking. Content coming soon.

Utah State Standards Alignment

Activity The House Hacking Calculator

Give students a simple formula

Potential Rental Income - Mortgage Payment - Expenses = Monthly Cash Flow

Scenario 1 (Duplex)

* Purchase price $300,000

* Down payment (5%) $15,000

* Monthly mortgage $2,100

* Rent from other unit $1,200

* Expenses (10%) $210

* Your housing cost $2,100 - $1,200 + $210 = $1,110/month (cheaper than renting alone!)

Scenario 2 (Triplex)

* Purchase price $450,000

* Down payment $22,500

* Monthly mortgage $3,100

* Rent from two units $2,600

* Expenses (10%) $310

* Your housing cost $3,100 - $2,600 + $310 = $810/month

Students calculate Which scenario makes more financial sense? What are the trade-offs? (more units = more income but also more risk, more work)

Phase 01

Final Reflection

Exit Ticket:

Write 3-5 sentences answering:

Would you consider house hacking as a way to build wealth? Why or why not? What would be the biggest challenge for you personally?

Extension: Go on Zillow or Redfin and find a multi-unit property in your city. Calculate whether it would cash flow using the formula from today's lesson.

Phase 02

Hook: The Free House Idea

Scenario: You buy a four-plex (four apartments in one building) for $400,000. Your mortgage payment is $2,800/month. You live in one apartment and rent out the other three for $1,000 each.

Ask students: How much money are you 'making' or 'saving' each month?

Answer: $3,000 in rent - $2,800 mortgage = $200 extra, plus you're living rent-free. The house pays for itself!

Discussion Question

This is called 'house hacking.' It's how many people get started in real estate investing. What could go wrong? (vacancies, repairs, bad tenants, market crash)

Phase 03

The Risks

Discussion Question

When House Hacking Goes Wrong

1. Vacancy: What if a tenant moves out and it takes 3 months to find a new one? (You're on the hook for the full mortgage)

2. Repairs: A water heater breaks ($2,000), roof needs repair ($5,000), or furnace dies ($6,000). Do you have an emergency fund?

3. Difficult Tenants: Late payments, property damage, noise complaints. Being a landlord means being a manager.

4. Market Crash: Home values drop 30% (like 2008). You owe more than the house is worth.

5. Being a Landlord: It's a job. Are you ready to unclog toilets at 2 AM?

Think-Pair-Share: Would you rather rent an apartment and invest your money in the stock market, or buy a multi-unit property and be a landlord? What kind of person is suited for each option?

Lesson Finale

Exit Ticket

Resources:

BiggerPockets.com - Real estate investing community

NerdWallet - Mortgage calculator

FHA Loans - Low down payment options (3.5%)

Note: This lesson introduces concepts - always consult a financial professional before making investment decisions.

House Hacking