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7 House Hacking Ideas

House hacking at its simplest is finding a way to make money off your home ownership while you live in your own home. Many first-time home buyers are using House Hacking to obtain financing for their first home. Or, maybe you are now exploring house hacking for passive income and a flexible retirement strategy. Either way, let’s talk about options!

Embarking on a house-hacking adventure offers additional income. It can also give you a glimpse into the world of property management. But what exactly is house hacking?

At its core, house hacking involves generating income from your residence. In the past, this often meant purchasing a multifamily property, residing in one unit, and renting out the others to cover your mortgage while building equity and maintaining the property. Savvy investors have long recognized the value of having tenants subsidize their housing costs.

Why should you consider house hacking? This strategy can serve as a short-term solution to lower living expenses or act as a stepping stone into real estate investment. Given the high cost of housing, house hacking allows you to leverage an existing asset to support your lifestyle, bolster savings, acquire additional real estate, and build home equity.

Crafting a house hacking strategy is driven by your imagination, local zoning regulations, homeowners association rules, and the demand for the housing options you can provide. Consider your skills, lifestyle, and property attributes. Are you handy and open to various living situations? Live-in house flipping might be your calling. Do you have extra space like a barn or garage? Think about renting it out. Your approach depends on your cash flow needs and comfort within your living space.

The financial appeal of house hacking becomes evident when you analyze the numbers. For instance, let’s say you purchase a $600,000 duplex with a 20% down payment and a 5.5% 30-year fixed mortgage. Living in one unit while renting the other at $2,500 per month would cover your mortgage and leave surplus funds for insurance, taxes, and repairs. Over five years, you could build substantial home equity and benefit from property appreciation, significantly boosting your financial standing.

Here are a few of house hacking ideas for our Sacramento California area that encompass various strategies for creating income off your property. These include:

  1. Buy or Create a Multifamily Home: Just as in the past, multifamily properties offer a solid foundation for house hacking. Living in one unit while renting out others is a proven approach. Some properties may be set up in a way that you can divide off a room or two by just building a wall. Looking for properties that are almost, but not quite, a multi-family residence can save you money on the purchase price since multi-family residences are usually more expensive per square foot. Check out this example of a home you can convert into a multi-family home: https://app.highnote.io/c/p/cca7e675/8378-central-avenue-orangevale
  2. Utilize Senate Bill 9 to split your property into 2-4 separate properties. SB9 information can be found at this link: https://app.highnote.io/c/p/77b7d984/senate-bill-9-and-adus-information-guide
  3. Offer Short-Term Rentals: Utilize platforms like Airbnb or Vrbo to rent out spare rooms. Some platforms like Golightly cater to specific preferences, ensuring safety and compatibility.
  4. Get Roommates: Sharing your home with roommates allows you to split expenses, including rent and utilities.
  5. Build an Accessory Dwelling Unit (ADU): By adding an ADU, such as a granny flat, to your property, you can create additional rental income.
  6. Provide Rental Space: Utilize your property’s extra space, like a garage or acreage, to offer storage or parking rentals.
  7. Do a Live-In Flip: Purchase a fixer-upper, live in it during renovations, then sell it for profit.
    When it comes to financing, buying a multifamily property is often as straightforward as purchasing a single-family home. Government-backed loans like FHA and VA loans make this process even more accessible, particularly for owner-occupants.

Ultimately, your house can be more than a residence—it can be an investment. By embracing house hacking, you can transform your property into an income-generating asset, paving the way toward greater financial freedom.





Maddie Piper

Maddie Piper

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