• Joe Steele

Should I House Hack?

Updated: Dec 24, 2020

I wanted to start a series on investing strategies in real estate, as this is a true passion for me and something I have been doing for quite some time. When working with a real estate agent, I find it most beneficial to work with someone that actually owns multiple properties, as they can speak to different ways to help you get the most return, because they’re doing it too!

Maybe you’re a recent college graduate who has enough for a downpayment, but aren’t sure you want to carry a mortgage payment by yourself.


Perhaps you’re a young couple with a child on the way, wanting to invest in property, and wouldn’t mind having someone else help you pay the mortgage.


Or maybe your upcoming wedding is going virtual and you have funds leftover and want to put them to good use…


The U.S. bureau of labor statistics shows that the average household spends around 25% of their income on housing. With numbers like this, it’s no wonder many people find it hard to make an investment for the future, while be able to afford other expenses like food, transportation, healthcare, and entertainment.


Enter house hacking.

Typically this occurs in single families, duplexes, triplexes and quadriplexes. The owner carries the mortgage then rents out the other units, with the goal of covering the mortgage costs with rental income. If it works out the right way, you’re essentially having your tenants cover the majority, if not all of the mortgage, taxes and insurance, getting all the appreciation, and owning an investment for the future.

Some other great reasons to house hack:

Lower financing: as an owner occupant, you’re getting the best rates as opposed to what you would get if it was your second home or investment loans. This also can likely give you the most possible cash flow.


Smaller downpayment possible: with FHA, VA, and other programs, you might be able to put down much less than the 20-25% an investment loan would require.


Investment experience: what better way to learn investing than to physically live there getting a crash course firsthand?


And lastly, transitioning into more rental properties. If you love the idea of being a landlord, you’ll be much more comfortable working with tenants and decide what strategies work best for you.


If you’re looking to learn more about real estate investing strategies like this, don’t hesitate to get in touch by following me @joesteelerealestate across all platforms. Prefer a video version of this blog? Please watch below and subscribe for more content like this!



 

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©2020 by Joe Steele