What is House Hacking?

[Jorge Vazquez]

What is House Hacking? House hacking refers to the method of making your house a revenue-generating asset. Traditionally, this implies purchasing a small multi-family property and renting out part of it. The capital collected from the tenants is used to pay all or part of the mortgage. As such, the homeowner can build equity while maintaining their property. When done correctly, you can easily live in an expensive house at a low cost. Some people can even generate a small income from their home ownership. Another reason to consider house hacking is the favorable mortgage rates that come with it. Since you’ll live in one of the units, financial institutions will view the property as owner-occupied. As such, you can enjoy lower mortgage rates than you would if you purchased a commercial rental property. Remember, though, that these financial benefits come at a cost. You must be ready to live in a multi-family home; however, you will have some control regarding the tenants who live there.

If you have experience with this, let me know how did it go?