A Brick & Banister guide on popular types of investments.
So, what is House Hacking?
According to Forbes, “House Hacking” is when portions of a primary residence are rented out in order to gain additional income. The reasons for this strategy vary—offset mortgage costs, cost of bills, etc. This method is often used by individuals who cannot afford to live in an expensive house, so they use creative tactics to accomplish this goal.
If done correctly, this allows people to live for free in expensive areas or even generate a positive income through homeownership. By utilizing every ounce of value a property possesses, individuals are able to benefit financially.
Pro Tip: Make sure to research your local zoning laws surrounding this practice and make sure your rental space is up to code before hacking!
Features to Look for if Trying to House Hack:
- Multi-Family Properties
- Finished Basements
- Additional Dwelling Units (ADU’s)
- Multiple Bedroom Houses
- Areas Easily Converted to Bedrooms
- Houses Near Public Transportation
- Houses in Areas Without Restrictions
- Houses with Adequate Living Space
What is a true flip?
Our friends at BiggerPockets say “house flipping” is the process of buying a distressed property, performing renovations, and then reselling the property for a profit. The more value you add to the property, the greater your potential return!
Taking the time to add actual value to a property (not just repainting it and reselling for a quick profit) is the kind of house flipping the real estate industry needs more of. Although time-consuming, the thoughtful process of creating beautiful living spaces for families and individuals helps strengthen the overall housing market.
Pro Tip: Despite popular belief, appreciating markets are not always a sure way for house-flipping success. As long as you stick to a good set of disciplined rules, house-flipping can be done under any type of market condition.
The bottom line is to buy right, do a good job on the rehab, stick to the budget, put a correctly priced end product on the market that others would want to live in. You’ll make a profit each time!
For more information and inspiration into the world of investing, we recommend BiggerPockets and AirDNA as two sources! Still have questions about real estate investment? Our team of highly skilled agents are here to provide personalized investing information!