Ever heard of a house hack?
Okay so let me do the honours of walking you through it if you haven’t. You buy (or rent, depending on your agreements with the houseowner) a multi-family home (multiple separate housing units in one building, or flats) or even a home with ensuite rooms. You then live in one of the flats or unit and rent out the others, or live in one of the ensuite rooms, and rent out the other rooms.
House hacking can be a great way to start buying rental properties and still have the luxury of collecting rent right away. House hacking can make it much easier to buy multiple rentals quickly. You can also house hack a single-family home, but you have to be careful with what arrangements you have with the house owner in a case where the home is rented. It’s very suggested to come clean with your landlord about this plan, and maybe get him in on it by offering something slightly higher for your rent, while giving him a written agreement to take utmost care of his property.
But you need to:
Figure out what an amazingly profitable deal would be for you
There are many ways to house hack. Some people do it with multifamily properties while others do it with single-family homes. But this is no cookie cutter situation or one size fits all. You need to figure out the best route for you to take. Figure out what kind of property you want, where you want it to be, and what the numbers will look like as far as income, expenses, and if this will actually make you money.
Discern what the cost implication is
You can’t go in clueless when you’re embarking on this sort of investment. You also shouldn’t let your real estate agent dictate everything that happens. Your involvement in the decisions surrounding your investment is key, as this is how you can ably take charge and control of your financial future. Figure out how much money you need. Buying a home is capital intensive, so the groundwork of financial planning has to be done. Come up with the figure required to buy the property.
If you’re a newbie to the business of real estate, enlist the help of a real estate agent to help you secure the most profitable deals that you seek. It is highly recommended that you buy into a great deal even though in you’re head you’re thinking: this is not the most ideal place for me to live. An agent who truly knows the turf, is fast on his feet and with his moves, is bent on working with and for you and knows the market well is the agent you truly need. No hurries when it comes to a house hack. Take the time to find the right property, it doesn’t have to happen ASAP
Shake hands on the property
This is the part where many go cold turkey, and it’s understandable. They find the right property or properties, but they always find a reason not to buy. Nothing ventured, nothing gained, yea that cliché, only it’s not. If you want to get ahead in life, you will have to take chances at some point. Buying a property is a big chance that you’re taking, but it is one that can pay off huge with less risk than you might think. You do not have to find the perfect property. What’s the worst that could happen? Maybe you eventually hate the place or things don’t work out like you thought they would, life doesn’t come to a grinding halt.
Now it’s time to make the money: Rent out the property
Whether you buy a multifamily property or a single-family house, you may need to rent out a unit or two…or a bedroom. But this cannot be overemphasized, you need to take the time to find the right tenant, else it can quickly turn to a nightmarish experience for you seeing as you’d be living there as well. Horror stories of tenant living situations abound when this arrangement is hastily done. Shall we talk about tenants you have to chase down to pay rent? Phew!!! Not worth the hassle
Set deadlines for your next big plan
It is just awesome that you have the house hack setup going on but that in itself will not translate to financial prosperity. If you really want to get ahead in life, you need to buy a lot of rentals. You need to figure out what to do say after a year, or two. Are you going to buy another property to hack? Are you going to take money out, and buy a regular rental property? There are a lot of options, so weigh all the options open to you.
Buying a great deal when embarking on a house hack as an owner-occupant is one of the best ways for the average person to get ahead in life. One issue that comes up with this strategy is that good deals often need work. Some of those need a little work and some are full-blown overhaul. However, if you are buying a property without much experience in real estate investing, it is advisable to avoid buying massive remodel projects.
House hacking takes some sacrifice and hard work. You not only need to do everything you would do to buy a house normally, but you also need to rent out the property and find a great deal. But for a certainty house hacking is definitely worth it for those looking to get ahead in life.