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4 Ideas for Successful House Hacking
If you’ve ever dreamt of turning your living space into a money-making venture, house hacking is for you. A report by Zillow surveyed over 6,500 homebuyers in 2023 and found that 4 in 10 referred to house hacking as a crucial opportunity.
If you want to dip your toes into the real estate world without drowning in a sea of upfront costs, we have four house-hacking ideas to kickstart your journey.
Idea #1: Integrate an Accessory Dwelling Unit into your property
An Accessory Dwelling Unit (ADU) is a fully equipped secondary housing unit that is an independent structure on your single-family residential lot. It’s your property’s sidekick, ready to enhance its earning potential. These versatile units typically come equipped with a bedroom, bathroom, kitchenette, and living area, making them a self-sufficient living space. The beauty of ADUs lies in their ability to serve various purposes – from providing a cozy space for family members or tenants to becoming a source of additional rental income.
The concept of ADUs aligns with the idea of making the most efficient use of existing urban infrastructure. By incorporating an ADU, you’re expanding your living space and making a smart investment in your property’s financial future. The additional housing option promotes affordability for potential tenants and opens up a new income stream for homeowners.
Idea #2: The classic house hacking play
The OG house hacking strategy is still one of the best. Master this, and you’ll be so confident you’ll want to move real estate for a living! The cornerstone of this idea revolves around turning your residence into a financial asset. You purchase a single-family or multi-unit residential property (a duplex, triplex, quad, or small apartment building) and make one of those units your home sweet home while renting out the rest.
The beauty of this strategy lies in its accessibility. By opting for more conventional loans and Federal Housing Administration (FHA) mortgages, you can snag a property with a down payment as low as 3%. It’s a financial maneuver that opens doors for aspiring real estate enthusiasts, especially those with limited cash reserves.
When you move into your chosen unit and start renting out the additional spaces, your tenants contribute to covering the cost of your loan, essentially making your living expenses significantly lower.
Idea #3: The BRRRR method
If you live in the property for a year, let the equity blossom, and then leverage it to fund your next venture, you have a rinse-and-repeat process that propels your real estate portfolio into growth mode. The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) play can be a profitable strategy, but it takes a little time and patience! It’s also crucial that your sellers’ agent gets you the best price possible!
Idea #4: The live-in-flip strategy
Two birds with one stone – dip your toes into real estate while setting the stage for future financial maneuvers. With a live-in-flip, you’re not just buying a property to call home; you’re snagging a diamond in the rough that’s in need of a makeover.
This strategic move allows you to secure a deal on a property with renovation potential, all while making it your living space – a home that becomes both your residence and your renovation project. The beauty of it lies in the afterglow; once you’ve brought the property up to snuff, you can flip it for a higher value.
Pro tip: Navigating the fine print in your mortgage agreement is crucial. Most first-time homebuyer loans require you to reside in the property for at least 12 months. It’s a commitment that adds a layer of responsibility, ensuring you’re not just in it for a quick flip.
Want to take your property game to another level?
Sky Five Properties offers cutting-edge market intelligence and the most sophisticated network of agents and specialists around. We can help you find the perfect investment property for your portfolio. Make the smart choice and speak to our experts today.
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Kaya Wittenburg
Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.
He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.
