You can buy an investment property for usually less than 5% down. I’ve done 4 house hacks. What is house hacking?
House hacking is a real estate investment strategy that involves purchasing a property, such as a multi-unit building or a single-family home with an in-law unit and living in one of the units while renting out the others. This can be a way to generate income to offset the costs of homeownership and potentially even make a profit. Here are some steps to take if you want to try house hacking:
- Determine your metric to define a good deal. 10% cash on cash return? $100/door in cash flow? Live for free?
- Research the market: Look for properties in areas with strong rental demand, such as near universities or in neighborhoods with high job growth.
- Determine your budget: Consider your financial resources and the costs of homeownership, including the down payment, mortgage payments, property taxes, insurance, and repairs.
- Location: House hacking combines your desire to decrease your living expenses while gaining an investment property. However, you also need to consider your daily life. How far of a commute are you comfortable with? Then that should be your driving radius from your house hack.
- Find a property: Look for a multi-unit building, a single-family home with an in-law unit, or a single-family home to rent out bedrooms that meets your budget and investment goals.
- Negotiate and purchase the property: I’ll help you negotiate the terms of the purchase and complete the transaction.
- Rent out the units: Advertise the units for rent and screen potential tenants to find responsible and reliable renters. Set rents at a competitive rate to maximize your income.
- Manage the property: Handle repairs and maintenance, collect rent, and handle any issues that may arise with tenants. You can do this yourself or hire a property management company to handle these tasks for you.
