When I first read about house hacking, I was very surprised. I thought this was a new thing, but I discovered that I’m actually already doing it for years.
House Hacking is a great new name for a concept that has been around for a long time. Although it isn’t new, the popularity has increased dramatically. While owning real estate has becomes less affordable – especially in city centres, inventive home buyers are finding new ways to own a great property.
Basically, House Hacking is a tactic that includes renting out portions of your property to generate income. This income is used to pay your mortgage and other expenses linked with owning your real estate. If done properly, it lets you live in a great location completely for free, or even generate some profit.
Of course, although it gives you some financial relief it doesn’t come work free. You must be willing to become a landlord and take on all duties that come with it.
Ok, so how can I House Hack?
The entire idea of an effective House Hack is to find real estate with as many rentable spaces as possible to generate income. These can be a multi-family building with several apartments, extra bedrooms in a single-family house, additional space that can be converted into liveable space or even a garage.
That’s basically what I did. I bought a multi-family house with a garage. The property had 4 apartments. I moved into one apartment and rented the other three units and the garage. Like this I was able to live for free and the rents that I received paid all expenses of the property.
Best is to make some calculations before you go house hunting to see what you actually need. First question you need to tackle: How many units do I need to rent to pay the mortgage and other expenses of the property?
Also keep in mind that the location is very important. A great location will give you a better rent and you will find tenants quicker.
If you don’t like to consider a Multi-family property, what about a single-family house with a granny flat? Have a look around in the real estate market and see what could work for you.
If you like to be an inventive real estate investor but doesn’t want to pay the mortgage out of your own pocket, House Hacking could definitely work for you. Your real estate isn’t just your residence, but it’s also providing you with an income.