What if you could eliminate your single biggest monthly expense—your housing cost—and start building your real estate portfolio at the same time? It’s not a fantasy; it's a powerful strategy called house hacking, and Edmonton is one of the best cities in Canada to do it.
House hacking is simple in concept: you buy a property with multiple units (like a duplex or a home with a legal basement suite), live in one of the units, and rent out the other(s). The rental income from your tenant then pays down a huge portion, or even all, of your mortgage and bills.
Why Edmonton is a House Hacking Paradise
Edmonton's real estate landscape is uniquely suited for this strategy. The city has a fantastic inventory of up/down duplexes, side-by-side duplexes, and single-family homes with legal basement suites that are still available at an affordable price point. This combination of property type and affordability is the magic formula for a successful house hack.
The Math: How Your Tenant Buys Your House
Let's break down a realistic example based on a typical up/down duplex in Edmonton, similar to the one in our sample analysis report.
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Purchase Price: $425,000
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Your Down Payment: Here's the magic. Because you will be living in the property, you can qualify for an owner-occupied mortgage. This means you may only need 5% down, instead of the 20% required for a pure investment property.
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5% Down Payment: $21,250
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Mortgage Amount: $403,750 (at 5.5% over 25 years)
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Monthly Mortgage Payment: ~$2,375
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Now let's look at your total monthly housing costs:
| Expense | Monthly Cost |
|---|---|
| Mortgage | $2,375 |
| Property Tax | $300 |
| Insurance | $125 |
| Total Monthly Cost | $2,800 |
This is what it costs to own the entire building. But you're not paying for it alone.
You live in the 3-bedroom main floor unit and rent out the 2-bedroom basement suite for a fair market rent of $1,250/month.
Now, let's recalculate your personal housing cost:
$2,800 (Total Cost) - $1,250 (Rental Income) = $1,550
Your personal cost to live in a 3-bedroom home with a yard and garage is now just $1,550 per month. That's less than the rent for a typical 2-bedroom apartment in the city. Every single month, your tenant is handing you $1,250 to help you pay down your mortgage and build equity.
Keys to a Successful House Hack
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Get the Right Mortgage: It is essential to work with a mortgage broker who understands house hacking. You must secure an owner-occupied mortgage to take advantage of the lower down payment requirements.
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Find the Right Property: Look for properties with layouts that offer privacy for both units, like separate entrances and soundproofing between floors. A legal suite is crucial for ensuring you are operating within the city's bylaws.
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Be a Great Landlord (Who is also a Neighbour): Screen your tenants thoroughly. Because you live on-site, it's easy to be responsive to issues, but it's also important to set clear boundaries to maintain a professional landlord-tenant relationship.
In conclusion, house hacking is the ultimate strategy for first-time investors. It lowers your financial barrier to entry, minimizes your personal living expenses, and provides you with a real-world education in property management—all while you build equity in a valuable asset.
Ready to find the perfect property to kickstart your house hacking journey? Book a free, no-obligation consultation with us. We specialize in finding duplexes and suited homes that are ideal for investors.
