House Hacking has become the go-to option for real estate investors all over the country. Check out how thousands of investors are getting a 50% or higher discount on their primary residence.
What is House Hacking?
House hacking is a type of real estate investing that involves purchasing a multi-unit property and living in one of the units while renting out the others.
It can be a great alternative to traditional real estate investing, as it offers several unique benefits.
Here are a few of the main advantages of house hacking compared to traditional real estate investing:
Lower upfront costs
House hacking typically requires a smaller upfront investment compared to traditional real estate investing.
Since you’re living in one of the units, you only need to come up with a down payment for a single unit rather than the entire property. If you haven’t tapped into the power of the FHA loan before, it is how you can acquire a property with 3.5% down.
It’s what my wife and I did on our very first home and we net about $700/month just on that one property. Not to mention, each month the profit increases little by little.
An FHA loan can make it easier to get started with real estate investing, especially if you have limited financial resources.
Lower risk:
House hacking can be a lower-risk investment compared to traditional real estate investing, as you’re able to offset your mortgage payments with rental income from the other units. This can help to mitigate the risk of vacancies and provide a steady stream of income.
Greater flexibility
House hacking offers greater flexibility compared to traditional real estate investing, as you have the option to live in the property and experience it firsthand. This can make it easier to manage the property and make informed decisions about how to improve it.
In our case, we’re able to adjust our strategy based on our comfort level. You can house hack by renting each room out, or go all the way on the luxury side and rent out a separate detached unit from the home, oftentimes a mother-in-law suite, ADU, or Garage apartment (whatever you wish to call it they are all very similar and units detached from the house in most cases.)
Potential for tax benefits
As a landlord, you may be eligible for certain tax deductions, such as the mortgage interest deduction, which can help to reduce your overall tax burden.
Overall, house hacking can be a great way to get started in real estate investing, offering a lower upfront investment and greater flexibility compared to traditional real estate investing.
It’s important to carefully consider the responsibilities and risks involved in being a landlord, as well as research local laws and regulations before embarking on a house-hacking venture.
Thank you for reading! Please leave some spicy claps and follow along as I try to navigate using Medium more frequently!!
Until next time,
- Eric
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