Do you have a dream home in mind but don't think you can afford it? You aren't alone. Many people can't get the home of their dreams simply because of their finances.
While it is hard to control your income, you can control how to use your finances. People can take control of their finances and purchase their dream homes by following a budget strategy called house hacking.
There are house hackers who live in a more expensive neighborhood without spending a lot on housing and living in their desired neighborhood without paying the average housing price for the area other people are in.
How can this be done? Creativity and flexibility are now revolutionary ways to become a homeowner in an expensive market. You can achieve your dream by hacking the house. The term "house hacking" sounds like a joke, but it isn't. House hacking is a budget strategy that many successful people use to obtain the home of their dreams or even make a profit. For example, Sarah Block and her husband made six figures house hacking.
The below guide is like a mini house hacking book and will help you begin your house hacking journey.
You may be asking, "what is house hacking?".
It is common not to know what house hacking is.
House hacking means living in a property (usually one that can house multiple families) that most people who have a similar budget to yours would not afford by minimizing household expenses. House hackers gain their coveted house by adopting creative ways to reduce monthly household costs.
They also maximize the return on taxes on the equity they invest in their homes.
If you want homeownership goals to happen in an area you wouldn't normally afford, you may want to consider house hacking. If done correctly, House hacking can be a simple and effective budget strategy by finding the house you want while spending less on the house than other people in your area - and making it tax efficient.
There are several common ways to house hack- you can earn extra income renting part of your property and selling personal belongings that are not a necessity and that you think you could live without.
House hacking involves one or more cost-saving methods that almost every homeowner can use to save money.
Those who house hack find creative and legal ways to reduce their household expenses, make them tax-deductible, and increase the equity in your house that you can use as a source of passive income.
The methods used will vary depending on where you live and how long you stay at the house. However, as a homeowner, you can potentially save tens to hundreds of thousands of dollars. That's a great deal of money and can be worth the hassle, depending on what you prioritize in your life.
While house hacking requires creativity and perseverance, there is not much money to start. You don't have to be rich or have a high income to live in a good neighborhood.
Remember that house hacking is about owning a property, not renting it. However, It doesn't matter if you own your house on your own or if you rent out areas of the home. As long as you are the owner and not the tenant, you have served the primary purpose of hacking the house.
Again, it depends on what you prioritize in your life. If you don't want to be on a tight budget, house hacking may not be the best idea for you. And that's ok. It's not for everyone.
While it may be difficult to live the lifestyle of a house hacker, the benefits are many for those who are willing to live the lifestyle.
Some advantages to house hacking:
Before you embark on this trendy budget strategy, it's important to know that house hacking won't work for everyone. Here are some house hacking strategies.
To be successful in hacking, you must live in an area with good economic growth.
Consider job opportunities and other indicators of total income within a reasonable distance. There is nothing better than living in a prosperous economy, where people move to the area you are looking at searching for a new job. Additionally, you have more of a chance of selling the property in the future for a profit when you live in a growing and prosperous area.
To help get the funds for your new property, you may have to sell some things that aren't a necessity in your life. Look for expensive items, ones you could live without. This could include a diamond necklace from a previous significant other or a sports car that you don't have time to drive around, anyways.
You don't necessarily have to choose things you might regret getting rid of. Part of budgeting is knowing what you have and what you can live without to get what you desire.
Selling your belongings isn't a necessary part of the house hacking process. Also, this likely will not be the only thing you need to do, as house hacking typically involves purchasing a property that is way out of a person's price range, but it can help in the process.
The most effective house hacking is buying a property that can accommodate multiple families. This will allow you to rent part of your home and use the rest.
You want at least two bedrooms and a full bathroom for your tenants in the rented space.
There are other, less traditional ways to rent your property if this doesn't sound like a good fit for your property. For example, you could also use the additional dwelling unit on your property to rent or build one yourself to rent. Then- rent it out on a property owner rental website like Airbnb. Legal and non-traditional rental strategies can work depending on what YOU are comfortable with and what your property has to offer.
When renting the property…
Pay attention to the square footage of the property you are purchasing. Additionally, you want to ensure that the square footage of the area you are renting is sufficient and that there are the necessary amenities available.
You want to buy a house with a decent living area and a nice side and backyard. That way, outdoor activities are still an option for your tenants.
When your offer is accepted, you will go through the closing process, and then the home is yours. Once you move into it, it is important to make any repairs that need to be made. Keep in mind while repairs may seem tedious, they help raise the worth of your property. So, the more repairs you do, the more you can charge in rent.
As a landlord, you want to make sure that your tenants can find transportation easily.
Public transportation can be great for efficiently transporting your tenants to and from the property. This probably isn't an issue if you or your tenants have a car. However, tenants who don't own reliable transportation want to live as close to public transport as possible.
If you have a home office or other business, you probably already know all the rules and regulations involved. If not, now is a good time to learn about the different licensing requirements and any restrictions on domestic use.
House hacking can be stressful, especially if you choose to live in an area with many restrictions on home businesses. However, it is not uncommon for sites to set limits on home business and short-term rentals. Therefore, you must familiarize yourself with these regulations before you can hack at home and try to find an area with fewer restrictions.
If you want to live and own a property you normally wouldn't afford, house hacking could be your solution.
House hacking can also be useful if you want to gain experience investing in real estate without financial burdens.