House hacking can be a great way to make money in real estate while also paying for your own living situation. And while house hacking is a great option, it isn’t always as easy as it sounds. Figuring out how to house hack effectively and profitably takes some time but can be a very worthwhile venture.
Making the Math Make Sense
Like any real estate investing, or any investing generally, you need to make sure that the math adds up with your house hacking strategy. That means you want to make a sound investment that will be profitable to you in the long run and not cause you to lose money on your investment. That means that you don’t want to purchase a home, or duplex, or whatever property that you will not be able to make money on. House hacking can help you to pay your mortgage, but if you buy something too far outside of your means, it may not be enough.
You also need to figure out how you will manage the tenants you have in your property. This is even more important than in a traditional rental situation because since you will live on the same premises, you will interact with your tenants much more. You need to set clear boundaries about tenant behavior and what is and is not acceptable. In some cases, you may need to go to more extreme measures like an eviction when rules aren’t being followed. That means you should also understand the laws around eviction should it come to that.
The Costs and Rules
One thing to know about house hacking is that because you live on the premises, you often have fewer costs and lower interest rates than when purchasing an investment property. That said, there are often municipal laws that you need to follow to make sure your house hacking is legal and safe. Learn about the laws in your community before deciding to house hack so you can make sure you are doing things properly.
House hacking can be a great opportunity to try out the world of real estate investment with a little bit less risk. It does come with some challenges, but if it seems like something you might enjoy, you should make it happen. The more you know, the more positive your house hacking experience can be.