BiggerPockets Real Estate Podcast: Episode Summary Episode Title: 4 Cities Where You Can Live for Free in 2025
Release Date: January 31, 2025
Host: Dave Meyer
Guests: Craig Kurob, Austin Wolf

Introduction to House Hacking

[00:00 - 02:05]

The episode kicks off with Dave Meyer introducing the concept of house hacking, a strategy where investors purchase multi-unit properties to offset or eliminate their own living expenses through tenant rentals. Host Dave Meyer emphasizes the necessity of choosing the right market for this strategy to be effective, noting that it requires careful selection and commitment.

Notable Quote:

Austin Wolf [00:01]: "Live for free in 2025. Today, we're talking house hacking."

Understanding House Hacking

[02:05 - 04:38]

Craig Kurob provides a comprehensive definition of house hacking, describing it as purchasing a one to four-unit property with a low down payment (typically 3-5%) and living in one unit while renting out the others. This arrangement can significantly reduce or eliminate the investor's living expenses.

Notable Quote:

Craig Kurob [02:05]: "House hacking is, in my opinion, the best real estate strategy... you can either offset your mortgage or live entirely for free."

Austin Wolf expands on the flexibility of house hacking, discussing the comfort continuum—a spectrum from high profit with low personal comfort to increased comfort with potential trade-offs in profitability. Craig shares his personal journey through different levels of house hacking, illustrating how one can gradually increase comfort while maintaining profitability.

Notable Quote:

Craig Kurob [03:25]: "We talk about the comfort continuum... For me, it was living behind a curtain in my living room while Airbnb out my bedroom."

Selecting the Right Market for House Hacking

[05:30 - 07:54]

The discussion shifts to the importance of selecting the right housing market for house hacking. Craig and Austin highlight that while house hacking was more universally feasible pre-pandemic, rising property prices and mortgage rates now make it essential to choose markets with strong real estate fundamentals and affordability. High-cost cities like Los Angeles and the Bay Area may no longer be the most viable options for beginners.

Notable Quote:

Craig Kurob [05:54]: "With mortgage rates being where they are, house hacking just might simply be unreal, unfeasible if you don't have quite a bit of money to put down."

Market Analysis: Fayetteville, Northwest Arkansas

[07:54 - 11:55]

Fayetteville emerges as the first recommended market. Craig explains that Fayetteville offers a favorable rent-to-price ratio of 0.47%, above the national average of 0.35%, making it an attractive option for house hackers. The city is experiencing wage and job growth, bolstered by an increasing university enrollment and an influx of residents from surrounding states seeking a better quality of life.

Notable Quote:

Craig Kurob [08:00]: "The median price there is below the national average... rent price ratio in Fayetteville is about 0.47%."

Austin concurs, expressing confidence in Fayetteville's potential due to its job growth and quality of life, despite Craig noting potential future supply increases that could affect profitability.

Notable Quote:

Austin Wolf [11:19]: "Northwest Arkansas has jobs that I would be personally interested in... I would do it."

Market Analysis: Chattanooga, Tennessee

[15:29 - 18:46]

Chattanooga is presented as the second market. Craig highlights its affordability with a median home price of $300,000 and a rent price ratio of 0.5%, slightly better than Fayetteville. The city's investment in a smart grid and fast internet has attracted startups, enhancing its appeal. However, the job market is primarily driven by manufacturing and logistics, with a less robust tech sector compared to other cities.

Notable Quote:

Craig Kurob [15:29]: "The median rent is actually better than Fayetteville at 0.5%."

Despite some positives, both Craig and Austin express reservations about Chattanooga's limited economic engine, particularly its lack of major corporate relocations and the distance from larger economic hubs like Nashville and Atlanta. They conclude that while Chattanooga is a viable option for existing residents, it may not be compelling enough to entice relocation solely for house hacking purposes.

Notable Quote:

Austin Wolf [17:05]: "I would house hack in L.A and Chattanooga, but would I move to Chattanooga? Probably not."

Market Analysis: Charlotte, North Carolina

[18:46 - 22:03]

Charlotte is introduced as the third market with a median home price of $370,000 and a median rent of $1,700, maintaining a rent price ratio of 0.5%. Charlotte boasts a strong job market, particularly in finance and insurance, supported by North Carolina's favorable tax environment, which is set to eliminate corporate income tax by 2030. This economic backdrop positions Charlotte for significant growth.

Notable Quote:

Craig Kurob [18:49]: "Charlotte has the highest median wage out of these group of cities because they just have so many great jobs."

Both hosts appreciate Charlotte's robust economic fundamentals, diverse job opportunities, and quality of life factors such as excellent higher education systems and strategic geographic location. The presence of a major airport and proximity to natural attractions further enhance its attractiveness, making Charlotte a strong candidate for house hacking.

Notable Quote:

Austin Wolf [21:19]: "Charlotte has a great airport... it's a super important I on a personal level."

Market Analysis: Indianapolis, Indiana

[26:46 - 31:05]

Indianapolis is the fourth market discussed. Craig praises it as a sleeper market with a median home price of $275,000 (the lowest among the discussed cities) and a median rent of $1,500, resulting in the highest rent price ratio of 0.54%. The city is experiencing robust job growth, particularly in pharmaceuticals and manufacturing, anchored by major employers like Eli Lilly. However, the tech sector has been declining over the past decade.

Notable Quote:

Craig Kurob [27:06]: "Indianapolis is a sleeper market that not too many people are talking about."

While Indianapolis offers substantial cash flow opportunities and potential for value-add investments through property renovations, both Craig and Austin express hesitation about relocating there. The decline in tech jobs and the lack of geographic constraints that limit appreciation make it less appealing for those seeking both cash flow and property value growth.

Notable Quote:

Craig Kurob [29:23]: "If your strategy and your thesis was a cash flow play... I would probably say no to Indianapolis."

Strategies for Moving and House Hacking

[31:05 - 33:18]

As the episode concludes, Craig offers strategic advice for listeners considering moving for real estate investment:

1. Engage an Investor-Friendly Agent: Find an agent who understands the local market and can assist with house hacking strategies specific to that area.

2. Visit the City: Personally experience the quality of life and assess whether the city aligns with both personal preferences and investment goals.

The hosts reiterate the importance of prioritizing real estate when selecting a market and encourage listeners to utilize the resources available on BiggerPockets.com for further guidance.

Notable Quote:

Craig Kurob [31:55]: "Talk to an investor-friendly agent in your market that invests in that market."

Conclusion and Takeaways

[33:18 - 34:10]

Dave Meyer wraps up the episode by emphasizing the benefits of house hacking as a pathway to financial freedom through real estate. He encourages listeners to explore house hacking as a viable investment strategy and to leverage BiggerPockets' resources to enhance their real estate journey.

Notable Quote:

Dave Meyer [34:10]: "Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing."

Summary of Recommended Markets

1. Fayetteville, Northwest Arkansas: Best for affordability and quality of life, with a favorable rent price ratio and steady job growth.
2. Chattanooga, Tennessee: Affordable with good rent yields but limited by its economic engine and job market diversification.
3. Charlotte, North Carolina: Strong economic fundamentals, diverse job opportunities, and excellent quality of life make it highly attractive.
4. Indianapolis, Indiana: Offers the highest rent price ratio and affordability but lacks growth in the tech sector and potential property appreciation constraints.

Final Thoughts: House hacking remains a potent strategy for achieving financial independence through real estate. Selecting the right market is crucial, and factors such as rent price ratio, job growth, economic diversity, and quality of life should guide investors in their decisions. Markets like Fayetteville and Charlotte emerge as top contenders for 2025, offering a blend of affordability, growth potential, and lifestyle benefits.

For more detailed insights and resources on house hacking, listeners are encouraged to visit BiggerPockets.com.