TikTok user @ceolawyer had advice for his followers.
“There is no reason for you to be broke in the United States,” CeoLawyer (real name Ali Awad, an Atlanta-based personal injury attorney) said in one video. “Starting pay at a fast food restaurant is $10 per hour. If you work two full-time jobs for an entire year, you should be able to save at least $20,000 net after expenses.”
“You do this for two years, put that money into a quadplex or a triplex, a multi-unit building,” he continued. “Pay 3.5 percent down payment, rent out the other rooms. In just two years, you can start cash-flowing several thousand dollars a month net, all from working at a fast food place.”
“There’s no reason for you to be broke in the United States.”
In other words, work two full-time jobs despite that being close to impossible, save every penny, take out a massive home loan on a multi-family building, and rent it out for higher rates.
Such a scheme might sound unlikely—even unethical, critics charged on Twitter, where Awad’s video went viral—but it’s far from unheard of on TikTok. There, a burgeoning scene of young people are encouraging each other to buy up large properties and lease them.
Some TikTokers advertise the tactic as “house” or “home hacking,” a clever way to live “rent free.”
Their critics call it “being a landlord.”
“This is how my parents live in this beautiful gray stone triplex for free. It’s called ‘house hacking,’” one woman’s recent video, announced. (The clip has since been reposted across Instagram and Twitter, by enthusiast capitalists and disgusted leftists, alike.) “I invited my parents to move into the bottom unit and rented out the other two units for $1,600, each. The two rents give me a total monthly revenue of $3,300. My mortgage payment and expenses are approximately $2,300. That leaves me with $1,000 in my pocket, and my parents live for free.”
It’s not a newfangled lifehack, critics noted in the comments—it’s literally just charging rent, in a moment of uncertainty for renters, millions of whom have lost income during the pandemic.
Still, investors are snapping up homes and converting them to rentals at an alarming rate, the Wall Street Journal reported this week, with buyers ranging from “from individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions.” A real estate consulting firm told the Journal that the surge in home purchases by rent-seeking investors “has set the stage for another speculative investor-driven home price bubble.”
The gap between newly minted landlords and renters—people able to buy a “gray stone triplex” and those consigned to renting one of its units—is all the more obvious on social media.
For instance, one young U.K.-based real estate personality, who uses Instagram to advise followers on “property investment,” earned Twitter scorn last week when she performed a dance about buying a house and renting it out for several times its mortgage. (The influencer, @KO_Estates, who claims to be a 22-year-old named Katie, did not return an email request for comment.)
Earlier this year, another TikTok user, @ayehxncho, attracted the internet’s ire when he promoted tax liens as “the new #1 side hustle.” He boasted of allegedly looking on local websites for homeowners who were behind on their property taxes. By paying taxes on the homes, he could put the homeowners in his debt and evict them if they didn’t repay him, he said. “I know a lot of people say, ‘Why would you take their house?’” he said. “If you don’t do it, the banks will. You either eat or you starve.” (He did not return a request for comment on Twitter.)
Left unstated in the get-rich-quick strategies outlined on social media: these investment schemes require someone to be the underdog. Someone has to lose their home to eviction, or rent out a “home hacked” property and support their lifestyle. And the country’s poorest are unlikely to afford down payments on massive, multi-family buildings.
Nevertheless, some TikTok users suggest otherwise.
It’s not clear whether Awad, who did not return a request for comment sent to his law office, has ever followed his own advice and worked two full-time food service jobs to buy a four-family home—or, for that matter, whether he’s even a landlord. But other TikTok users have claimed to employ the practice on their own roommates, and encouraged others to follow them for “home hacking” tips.
In one recent TikTok, with more than 2 million views, user @faaresq acted out both sides of a dialogue between “Roommate” and “Smart Roommate.” (He did not return a request for comment.)
“How do you never do any work, but always have money for rent?” the roommate asks.
“Look,” the character “Smart Roommate” responds, “I didn’t want to say this, but I own this property.”
Roommate: “You don’t rent like me?”
Smart Roomate: “Nope. I owe $1,000 a month to the bank, and you pay me $1,300 a month for rent, paying for my mortgage and giving me an extra $300 a month.”
Roommate: “Wait, so you’re my landlord? That means you’re living for free. How is that even fair?”
Smart Roommate: “You need a place to live, don’t you? Don’t worry, it’s called ‘house hacking.’ All you have to do is follow me and I’ll teach you all about it.”
In the comments, viewers panned the arrangement as unethical. “Lmaoo I feel like telling your tenants this can be a little deadly,” one wrote.
“You’re right,” the video-maker replied, appearing to concede such practices might be less than popular. “We gotta keep it lowkey.”