House hacking is a concept we try to go for, but it can help you buy a single family home with a low downpayment, live, and then rent out the rest of it. The goal is to reduce or eliminate the housing cost, and by doing this, you can increase the money you’re saving, creating a solid financial foundation to tackle new investment chances. So, now that you have an idea of it, there are three levels. Level 1 entails having the tenants cover the portion of your rent, having it cover all of your monthly, and then the third generating cash flow.
So how can you achieve the first? Well, a mortgage payment is kind of a way of life, since many stay in a house for a short period of time. Every month you’re writing checks period. But, if you were shelling out half of what you normally would, you can reduce your housing expense a lot. Sometimes, moving some weights and such out of your guest room can bring another in, and then from there, you’re essentially a house hacker. Even if it’s only a little bit of money, it pays off.
Then there is level 2, which involves more planning and intent, and really this can be bringing in a home that has an extra bedroom, and you can, for example, rent out a couple of extra bedrooms. Having a finished basement that you rent out can completely cover your housing costs. Adding the third period to the unfinished basement, along with renting out the extra bedroom, you can completely cover the costs of housing payment. You can theoretically do this anywhere, you’re just going to have to make a few sacrifices here and there.
Finally, there is generating cash flow on top of it, paying for your payment and that. It is possible. You can use low downpayment conventional loans for a duplex, triplex, or quadplex, and from there, you live in one unit, rent out the rest, and from there, you can cover the entirety of your mortgage. You can literally cover everything, and have a few hundred dollars every single month.
You can do that with roommates, and then renting out houses and rent out a part of the rooms that are in this.
Now reaching level 3 is quite hard. it’s not for everyone either. If you’re cool with roommates, then this might work, but if you like your privacy, this may not be idea. It does create a different life, and you will need to sacrifice a few things. House hacking is powerful, and everyone should try it since it can ultimately impact the financial situation that you have, even if you didn’t even realize that you can do this.
House hacking is pretty important for the success and ability of your business, and for those who are looking to truly master this, it does take some time and effort, but you’ll be able to easily.