Imagine owning a home and having someone else help pay your mortgage. Among younger generations, many of whom see homeownership as simply a pipe dream, this sounds almost too good to be true. Housing is the largest expense for most Americans, after all, and it’s become more expensive than ever.
But some resourceful buyers have been able to spend less and even live for free in their own home. Enter: “house hacking.”
What is house hacking?
House hacking is a strategy where homeowners rent out part of a single-family home – or units in a multifamily property – to offset or even eliminate housing costs. It’s a new name for an old practice, but still a great way for buyers who might otherwise be priced out to purchase a home.
In some cases, house hacking can even turn a residence into an income-generating asset, which may be appealing to those looking to break into real estate investing – especially as investor activity falls. House hacking differs from owning a traditional investment property because you’re not renting out the entire home; you’re living in it, too.
So, if you’re looking for a way to make homeownership more affordable or want to begin your investment journey, house hacking could be a good place to start.
Why is house hacking popular?
House hacking is popular because it offers an achievable path into homeownership without bearing the full financial burden alone. It’s seen as a way to “hack” the market by removing some of the cost. Many also use it as a first step into real estate investing.
Its popularity has steadily grown over the past few years as housing costs have ballooned. In many markets, buyers now need to earn six figures to afford a starter home – and far more in pricier cities.
While some house hackers earn a profit, many today are simply looking to reduce their living expenses. With record-high home prices and elevated mortgage rates, the cost of entry is steep – and extra income is not…