If you’re looking to buy a home, the current real estate environment can be very daunting.Between the pandemic, rising inflation, and the housing crisis, becoming a homeowner seemsmore unattainable than ever. In this article, you will find an overview of…
For those who are just starting out their investment portfolio, house hacking is a great way to build wealth through homeownership.
The benefits of house hacking are two-fold: You get the benefit of building equity in a home and earning income from your tenants. The latter is referred to as the “house hack” portion of the strategy because you’re essentially renting out space that you don’t occupy yourself.
To start house hacking, you should have an existing home or property that a tenant can rent out or be looking for properties that can be rented quickly, as this will help with cash flow and paying down debt on your loan faster.
If you’re a first-time homeowner looking for more information on buying a home, we recommend checking out our guide to buying a home for beginners.
There are 3 primary ways to house hack:
1) House hacking by buying a home and renting it out is a great way to get started in the real estate market
This method allows you to purchase a property without having to come up with all of the money upfront, as you will be able to cover your mortgage payments with the rent from your tenants. Additionally, this strategy can provide you with positive cash flow each month, which can be used to save for future investment opportunities or pay down other debts.
2) Another option for house hacking is to buy a duplex or other multifamily home and live in one unit while renting out the others
This can be an especially lucrative option if you are able to find a property in an area with high rents. By living in one unit of the property, you will effectively be paying half of your mortgage each month, while also bringing in rental income from the other units. This strategy can help you build equity quickly, while also providing a steady stream of income.
3) Finally, another option for house hacking is to buy a home and rent out rooms, then live in the rest of the house yourself
This is often a good option for those who want to live in a specific location but do not want or cannot afford to purchase an entire home on their own. By renting out rooms in your home, you can cover your mortgage payments and even potentially make some extra money each month.
Why are millennials using house hacking for their mortgage payments?
Millennials are looking for alternatives to high mortgage payments. Real estate investors recognize that there is a growing number of people who want to own property and become landlords. House hacking is an alternative way to buy property that involves living in the unit you are purchasing.
It’s a combination of house sitting and renting out your home when you aren’t using it. House hacking can be a great way to get into real estate investing, especially if you are a millennial looking for an affordable way to purchase your first investment property.
What are the steps to prepare for your first house hacking?
Before you start house hacking, there are a few things you should do to prepare. First, make sure you have the financial resources in place. This includes having enough savings for a down payment, closing costs, and any necessary repairs or renovations. You’ll also need to have steady income to cover your mortgage payments and other expenses. Next, research the neighborhoods you’re interested in and look for properties that meet your criteria. Once you’ve found a few potential homes, get in touch with a real estate agent to help you with the next steps. Finally, be prepared for some extra work and responsibility when it comes to maintaining your property and keeping up with repairs or renovations. But if you’re willing to put in the effort, house hacking can be a great way to save money on your housing costs while also building equity in a property.
So there you have it, house hacking is the best way to buy real estate as a millennial. Not only does it provide an affordable home for you long-term, but it also allows you to make money in the meantime. If you’re looking for a way to get into the real estate market and start building your wealth, house hacking is the way to go.
Ready to get started?
In just a few clicks you can see our current rates. Then apply for your mortgage online in minutes!
Related articles in: Home Buying
How real estate can hedge against inflation
Inflation is one of the great real estate investor’s best friends. While most people think of inflation as something that just makes things more expensive, it can also be a powerful force that helps drive up real estate values. That’s…
Paying off student debt or Getting a mortgage first?
There’s no right or wrong answer when it comes to whether you should pay off your student debt before getting a mortgage. It really depends on your unique financial situation. However, there are some things you can consider that may…
What are the Hidden and Unexpected Costs of Home Buying?
Article written by Kate Anderson – Big City Realty Yes, a home may be a significant asset and a stepping stone to a more secure financial future. However, first-time home buyers might be surprised by how much homeownership might cost…