Having their own home is the dream and essential need of many people all around the world. To achieve this goal, an average American spends between 35 to 50% of their budget on property investment. As it is not easy for everyone to balance their home budget in such a way, many of them choose options like house hacking to save money. In this method, they give a portion of their primary house on rent to pay property mortgage or other house-related expenses.
How does House Hacking work?
House hacking can be done with any single/multi-family house, triplexes, duplexes or living space. A house owner can give such property on rent to generate regular income.
The structure of a rental building can vary from different angles and goals. Choosing an option depends upon the comfort, space, needs and objectives of both the owner and tenant.
A Financial Assistant
While renting out a portion of their house people would have to compromise with many things, especially privacy. But at the same time, this little sacrifice helps to eradicate their several financial crises in a short period of time. They can save money to pay not only their present mortgage installments but can also offset the cost of insurance, repairs, electricity bills, etc.
The different ways of house hacking:
A house hacking can be done in various ways as per the objective of an owner and the needs of a tenant. These interesting means provide an easy way to collect finances for your investment. In other words, this post suggests the different techniques and guidelines to renting out a space to cover the mortgage costs. Some of the ways are:
1. Many houses have some extra rooms which are not commonly used by anyone. Homeowners can give this suite to tenants who like to live with a family. To protect their privacy, they can choose a family friend, relative, or co-worker for this purpose.
2. Some houses do not have extra space for sharing. In such a case, an existing space such as a basement, drawing room, etc. can be modified or renovated. This not only increases the value of a home but also saves money to build other rooms.
3. If homeowners do not want to share their living space with anyone, They can choose an apartment in their courtyard to give on rent. In this way, they would not need to share privacy with anyone.
4. Another option is buying a duplex or multi-unit home. Many people like to invest in such types of property to get extra income and pay their loans. In these houses, a person can have an entirely separate unit to live peacefully. It provides a great way to enjoy privacy both for a homeowner and tenant.
In addition to these, homebuyers can also purchase houses that need to be renovated and available at less cost. They can choose to live in a prepared area and let construction go on another part. This will help save their money living in another house, and if they sell it after one year to purchase another home, they can save capital gains tax also.
Though house hacking is providing financial assistance in so many ways, it is still best to choose your option wisely with proper planning. It should suit your needs, space as well as all financial conditions.