​Is Live/Work The New House Hack?

You may have heard about house hacking through duplexes or multi-family homes. 

You buy a multi-family, live in one apartment, and rent out the others. Do it right, and you may even live “rent-free”. However, what if you can only afford duplexes in “bad” neighborhoods, or places you’d never live in? Does that mean you have to compromise your safety or put your dream of owning a home on the backburner?

Live/work is another solution.  If you’ve been reading my blogs, you know I’m interested in co-working, where you work with others under one roof in a shared space. It’s very popular in major cities like New York, San Francisco, etc and growing every year. Live/work is the same, but with a twist—you stay, but everyone else leaves at the end of the day. 

Here’s how it works: 

You buy a 3-4-bedroom house, keep a bedroom for yourself, and rent the other bedrooms (not apts) to solo-entrepreneurs. You charge rent for every bedroom anywhere from 150-500/month. Some areas call for as much as $1000/month per bedroom. You can make about $1500/mo in some cases, without the maintenance of the apartments (with the exception of buying desks, instead of beds, and light snacks available in the kitchen, etc). At the end of the day, it can pay your mortgage. 

A few more sidenotes:

• Go big. With this, you don’t have to settle for a multi-family in an unsafe neighborhood. If you want to charge more for the bedrooms, go for larger, luxury style homes or mini-mansions in affluent areas.
• Go private. To finance this, you’d need a private money lender who is curious about this niche or has vested interest in entrepreneurs, technology, etc.
• Go social. You can attract influential, local entrepreneurs who you may never meet otherwise. This can enhance your social life, especially if you hate leaving the house ;) If you live in or near a major city, you may opt to attract international entrepreneurs who need an office space when they are in town.
• Go niche. You can hold events and make your home an intellectual hub or kick everyone out at 6pm. It’s up to you. You live in the place. Are you a scientist? Perhaps you want to rent your rooms to other scientists? Are you a poet or computer whiz? You may want to market and rent to other poets or tech geeks.  This usually works if you already belong to an active group in your area.  Without a niche, the marketing appeal and the value of the space diminishes. 
• Be realistic. Live/work means that you are living and working in a space that others will come to everyday. Can you deal with this for at least 6 months to a year? Is there enough space in the driveway for more cars? What will neighbors think? If you have an average property, start with renting out 2 bedrooms. You can have set hours and rules, or no more than 1 person an “office”. However, if you get a large, luxury mcmansion you may have a large driveway for several vehicles and enough space that no one would care. Some live/work homes have turned into major businesses and brands like TheGlint or the The Blackbox mansion. 

I plan to do further research into finding the right private lenders and live/work as a possible solution to affording my first property. 

With the success of Airbnb.com, Uber.com, and others, people are looking for spaces that are personal, or a home away from home. Live/work gives you a chance to own a beautiful, comfortable home, build your network, and live “rent-free”.