You may have heard the term ‘house hacking’ and you may be wondering what it is. Well, it is the way of living in a property in such a way that others would pay rent or mortgage of your property. Although, it is all about saving the housing costs but there are some effective ways you can even earn money though this option.
One thing that you need to keep in mind is that house hacking can turn out to be the only best option if you want to begin with the real estate investment and you want to move towards financial independence.
Below discussed are some effective ways for house hacking.
Traditional way to hack the house
The traditional way of house hacking mainly involves purchasing a 2 – 4 unit property and renting out all of the units except the one you live in. if you are a single person, you can even share your room with a roommate.
Although, you may be able to save the costs using this method if you living in the lower-priced market, this strategy doesn’t really work if the property is in higher-priced market.
Living in the living room and renting out the rest
Maintaining a big single family home or a duplex in the high-valued area is not easy when you have cash shortage. One way to save the costs is to live in the living room and renting out the rest of entire home. You can manage things pretty easily eve if you are a couple. Once you have a source of sufficient income, you always have the right to serve the notice in order to reoccupy your entire home.
Living in an RV and renting out entire home
You can be a little more creative to save costs by purchasing an RV. The good thing about an RV is that there are no additional property taxes associated with an RV. Then you can rent out your entire home to the tenants. That will help you save huge amount of costs. In fact, you may be able to earn profit even after paying the mortgage.
Buy, live and flip
Flipping business is never dead. It is one of the primary ways to earn profits in real estate. The traditional way to flip houses is to buy a property, repair and renovate it, and then sell it out on higher price to earn bigger profit. However, you still pay for the mortgage of the house you live in. the house hacking way of flipping involves buying a property, living in it while renovating it over a period of time, and then selling it out. You have to live in the property for at least two years because it is going to save you capital gains tax.