How Millennials Are Hacking Their Homes to Live for Free


It’s no secret that housing costs can be one of the most expensive line items in a monthly budget. In fact, statistics show that the average amount spent on housing is about $1,483 per month, and accounts for about 30 percent of the average married couple’s income.

Millennials have it worse. Recent data shows that they spend only 81 percent of their income, compared to the 91 percent that 25-34-year-olds spent a generation ago. But their expenditures on things like healthcare, Social Security, education, and housing are far higher than their predecessors.

Some millennials are circumventing this, learning how to “hack their homes” and live for free. Here’s how they do it.

Buy a Home for Cheap and Get Renters

Some millennials are hacking their homes by buying a cheaper piece of property, such as a home in foreclosure. They typically use an FHA loan to complete the sale, then rent out rooms to roommates, charging them enough to pay the entirety of the mortgage. These savvy landlords are then are essentially living for free. 

Millennials really looking to make an extra buck will live in the least desirable room of the home, like the basement (if it’s up to code) or the smallest bedroom. That way, they can charge their renters a bit more, and lower their own rent (or eliminate it altogether.) If you decide to pursue this path and do take on renters, be sure to have them sign a legal renters agreement and put down a deposit in order to protect yourself and your investment.

Keep in mind that this approach doesn’t take into account things like home repairs, house upkeep costs, and utility bills. Unless of course, you can secure enough renters to pay a bit more than your mortgage and cover both the mortgage and upkeep costs.

Sound unrealistic? It’s actually doable. Let’s say you buy a 3 or 4 bedroom house for $200,000 in an up-and-coming neighborhood. You secure an FHA loan, which requires a down payment of as little as 3.5 percent of the total purchase price. After taxes and fees, this ends up being roughly $7,000.

Your mortgage, in turn, will be around $1,500 per month. Estimate about $300 a month for upkeep and bills. Let’s say you secure three roommates, and you crash in the smallest room. You’d charge your roommates $600 each, or even charge them on a sliding scale based on the size of their rooms. This would effectively cover the mortgage, bills, and any upkeep.

Apart from your $7,000 initial investment, you’ll be living completely rent-free. And you just freed up 30 percent of your income. Think of what that would do in your ​401(k), your investment portfolio, or the dent it will make in your student loans.

Move in With Mom and Dad

If buying a home isn’t financially realistic for you, there are other house hacks to explore.

Many millennials are throwing in the proverbial housing towel and shacking up with mom and dad to save some extra cash. In fact, around 31 percent of 18-34-year-olds lived with their parents in 2016, compared to just 26 percent 40 years ago, a trend that’s more prevalent in the Northeast and Southern regions of the U.S.

While living at home may not be considered desirable to some, it can not only help cut the cost of housing completely but can also help free up some cash to achieve financial goals more quickly, like paying off debt or saving up for a home down the line. However, when considering this approach, it’s best to have a deadline in mind.

Think Small

Can’t afford to buy a big house? Have you considered a tiny home? The tiny house craze has taken over both HGTV and the internet, and millennials are getting on board. According to recent data, there are approximately 10,000 of these sub-400-square foot homes in the U.S.—and many of them are owned by millennials looking to live a debt-free lifestyle.

However, if pursuing a tiny house is the house hack you crave, be sure to keep in mind common obstacles, like how you’ll finance it since many lenders won’t grant a loan for these tiny dwellings. Tiny homes can cost anywhere from $10,000 to $40,000, so that’s definitely something to keep in mind. Zoning laws may also be an issue, so you may have to work a little harder to figure out where to “park” your tiny house.

Other Options to Consider

There are several other “house hacking” options to consider if you are a millennial looking to significantly lower—or eliminate completely—your monthly housing costs, including:

  • Becoming a pet sitter or long-term house sitter,
  • Using Airbnb to rent out extra rooms in your house,
  • Bartering or trading skills for free rent, and
  • Becoming a live-in nanny.