What's House Hacking?

[Ralph DiBugnara]

One of the ways to get the most out of your home purchase is house hacking. This is when you rent out the other units of your residence in a way that, ideally, add up to cover your monthly mortgage and expenses. Let's say you have a home with mortgage and expenses adding up to $2,500 per month. This is a 3 unit home and you're occupying one of them. If you're able to rent out the other units for about $1,250 each, you're house hacking! The other units are paying the living expenses related to this property. Continuing the conversation from a previous post, have a close estimate of what the real costs of your home would be by researching previous utility bills, for example. In addition, investigate how much you can really rent the other units for by looking up comparable rents in the area.

Bonus Tip:

Always save at least 1-3% of the value of your home for unexpected expenses, even if you're house hacking.