You might have read about house hacking as one of the real estate investment strategies from the previous articles in this blog. But we haven’t dug deeper into it such as its benefits and how to do it right. I have to tell you, house hacking is an amazing way to get started in real estate and build your investor’s portfolio.

It’s also one of the strategies that don’t require a huge investment capital. A lot of successful real estate investors started here. From school dropouts, employees who quit corporate life, and to stay-at-home mothers. Without further ado, let’s get into it.

What is House Hacking and Its Benefits?

House hacking is a real estate investment strategy where you live in your property and have the other rooms or areas rented. A lot of real estate investors do this to pay for their mortgage while still being able to have a home and earn money to pay the bills.

This investment strategy is also a good way to lessen your down payment especially if you’re a veteran or got approved for a Fair Housing Act (FHA) owner-occupant loan.

5 Tips to House Hack Successfully

1. Buy a single or multi-family home

House hacking won’t work for apartments and condominiums. That’s why you should buy a single or multi-family home because they have multiple rooms, restrooms, and bathrooms. They also have spacious backyards, front lawns, kitchens, living rooms, and parking spaces.

The more spacious the home, the better. It means you can house more tenants. Spacious homes for house hacking are very appealing to renters because they know that they won’t live in a congested environment.

2. Do a little renovation

If the property you’ve bought has only a few bathrooms and restrooms, you can add some to accommodate your tenants. It’s also important to make the walls inside the house noise-insulated. Want to add a little pizzazz to the property? Check out these tips.

This is to make sure that your tenants won’t disturb one another as they stay in their respective areas. Add a layer of security. Tenants are willing to pay more for a place that’s sure to keep them safe

Don’t forget to make use of the garage. If the garage serves no purpose such as storing your car or tools, why not turn it into a living space as well? Remember, the more vacant rooms, the more tenants you can accommodate. You can also use a garage as a commercial space.

3. Make the interior as spacious as possible

Clean the living room, kitchen, and rooms of the tenants. Eliminate furniture or appliances that you think your tenants won’t need during their stay. This is to make room for them to put their possessions that they have brought with them.

4. Clean the basement and finish it

Just like the garage, a basement can also be used as a living space. You’ll need to make use of it as well by cleaning the area and doing some renovations. A lot of house hackers live in the basements of their rental property.

They also build a separate cellar door so they won’t have to stride through the house interior just to get into their living space.

5. Choose an area to live in

Once you have done all the necessary cleaning, decluttering, and renovation, it’s time to pick which you would use as your living quarters as a landlord. You can choose the closest room to the front door if you want to be the guard of the house.

The attic is also a good place to sleep in if you’ve managed to clean and renovate it as you did with the garage and basement. And like I’ve said, you can also live in the garage or basement if you want all the bedrooms to be occupied by tenants.

Before you do buy a single or multifamily property, you must ask the local housing authorities if housing is legal in your area because some jurisdictions prohibit it. Analyze the property for its potential to bring in tenants as well.

If everything is A-ok and you’ve followed the instructions above, register your business, set your price, find renters, set house rules, and pay your bills and mortgage on time.

Once you’ve earned enough money, open another real estate investment or house hack another property. Rinse and repeat until you’re able to earn multiple properties and keep a steady passive income.