House Hacking in Hawaii: Using Rental Income to Help Offset the Cost of High Mortgages

It is no secret that living and teaching in Hawaii comes at a high cost. A recent 2019 study by WalletHub ranked Hawaii as one of the lowest annual salaries for teachers when adjusted for the cost of living. Here, I am going to highlight three educators who used creative solutions to help them live comfortably in high-cost areas.

House hacking is when you buy a property that has the opportunity to generate rental income. You can buy a small multi-unit property like a duplex, triplex, or a single-family home. The idea is to live in one part of the home and rent the other part of the home to generate income.

Meet 3 educators that used this method to make homeownership more affordable:

1) Jay and Annie*

Jay and Annie were living at their grandma’s house and decided that they wanted to move out. They were considering renting a modest 2-bedroom apartment on the Leeward Coast for $1,600. They found out that the area where they wanted to live qualified for a USDA Mortgage. This is a low-cost insured home mortgage that allows people to buy in rural areas with zero-down payment.


They ended up purchasing a home for $415,000. They loved this home because of the rental capability. There is a separate entrance to a portion of the home that is a separate bedroom and living space. Their mortgage payment is roughly $2,500 but they are able to rent the separate space for $1,200. This means their mortgage payment is $1,300 – less than what they would have paid to rent the 2-bedroom apartment!


Breakdown of Numbers: 


2) Leslie and Dad

Leslie bought a duplex along with her dad as a co-investor. Previously, she lived in a 3-bedroom house that she rented with 2 of her teacher friends for several years and paid $800 in rent for the shared space. Leslie recently took a position as a Vice Principal at an elementary school and knew she wanted to purchase a home instead of paying rent. Leslie was fortunate enough to be able to pay a 20% down payment and used a conventional loan. The home is a duplex with 3 bedrooms and 1 bath on each side. Her mortgage payment is $4,000. She rents out one side of the duplex for $2,400. Currently, she rents a room to a friend for an additional $800. She is able to own the home for almost the same price as renting!


Breakdown of Numbers: 


3) Nick and Lyn

Nick and Lyn purchased a home in their late 20’s that they could grow into. Since they were used to having roommates, they knew they preferred purchasing a bigger, single-family home where they could have roommates help with the mortgage rather than purchasing a smaller condo/townhome. Now in their 30’s, they decided they wanted a little more privacy and did not want to have roommates anymore. They renovated the home to have an attached unit with a separate entrance. The back unit is a studio with a full kitchen and separate guestroom that doubles as a living space. They live in this space while renting out the main home. The main house is 4 bedrooms/ 3.5 baths where they rent out the rooms for $900-$1,200 a room. Their total rental income is $4,100 while their mortgage is $3,500.


Breakdown of Numbers: 


Having roommates and being a landlord isn’t for everyone. However, in each of these situations, these people were already in similar living situations and were used to shared living spaces. If you want to start investing but do not want to tackle the mortgage by yourself, house hacking might be a way for you to get your feet wet in homeownership.

Purchasing your first home can be scary and overwhelming. But our team at Landed can help no matter what pathway you choose to take. We have a network of agents and a whole homebuying team to assist along your homebuying journey.  

*Names have been changed at homebuyers' request



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About the Author

Jaimelynn Cruz, Property Operations Lead

Jaimelynn Cruz is a former elementary school educator and real estate investor. She graduated from the University of California, Irvine with degrees in economics and sociology. She has a graduate degree in education and an MBA from the University of Hawai‘i, Manoa. Previously, Jaime spent some time in Chicago as a Teach for America Corps Member. As a teacher, she taught at Chicago Public Schools, Kamaile Academy, and Kamehameha Schools. She was also an instructor for Johns Hopkins University School of Education for several years. In her free time, she loves to travel, hike, and swim in the ocean.