Renting a room out of a property that you own can be tricky – especially if it’s a property that you’re currently living on. But whether you have a financial necessity to help pay back a mortgage, or whether you just want to make some extra cash, this is how to make house hacking work for you.
Find a Duplex or Multi-Family Property
The number one problem with house hacking is space and privacy! Even if you are the only resident of your home, your privacy is not something you should ever sell. The mental and emotional stability that could be at stake really aren’t worth whatever rent someone agrees to pay. That particular problem grows exponentially if you are also trying to raise a family at the same time. Thus, finding a duplex or some other form of multi-family property would be an ideal pick. It would also encourage other families to move in, who tend to be more responsible tenants than single residents.
This step is probably the most important for peace of mind when house hacking. The quality of the tenant will determine how much maintenance you have to do on your property, as well as being a large force for positive or negative in your personal life – given that you’ll be living very close. While the particulars of what you’re looking for are up to you, make sure to screen applicants by requesting references and a housing history that is confirmable. Have interviews in person in order to best gauge the individual’s level of responsibility. The applicant’s financial situation is important, as well: finding long-term tenants, for example, reduces the frequency of vacancies.
Any venture within the world of real estate requires careful preparation in order to avoid a life-ruining misstep. Draw up a budget for yourself if you do not already have one. Compare the expense of purchasing a duplex and/or what any repairs would cost, versus how much you would receive from the tenant(s) and how frequently. In order to attract the quality of tenants that you want, it is also a possibility you will need to heavily refurbish, redo, or replace parts of the house. Obviously, make sure to factor in the monthly payments on the house itself as well. Once you’ve carefully checked every angle to prepare for potential accidents or circumstances – full steam ahead!
You’ve got this! For all the work and trepidation that can go into house hacking, the results are almost definitely worth it. Being able to pay off your debts quicker with that extra monthly payment will enable you with even more financial freedom in the future to explore the real estate market as you please.
Check out this article about the projects to take on that can make your home look great!