When I was much younger, I worked at Kinko’s in the graphic design department. One morning, a customer came in and sat down at the rental computer and opened Microsoft Word. After a few moments, he complained that government hackers were altering his resume as he typed it. I tried to explain that it was the spellchecker feature, but he wouldn’t hear it. He complained to my manager, who insisted that I reinstall the computer. I left for a career as a freelance designer shortly thereafter.
When you mention house hacking, many people misunderstand that too. Broadly speaking, house hacking is having other people pay your mortgage on a primary residence. You can accomplish this several ways – through
Having a 20%+ downpayment is wonderful, and makes the process easy, but for those who don’t have wealthy and generous parents, there are still a few options. VA loans are a great way to get started for those who qualify, as are USDA loans. For those who don’t, a 5% downpayment conventional mortgage may be an attractive option. FHA loans, while attractive from a downpayment standpoint, have high upfront fees and ongoing annual fees that may not work for someone wanting to cut costs.
Regardless of how you finance, it’s important to think about the property you purchase as a cash flow generator. Do some research on AirBnB rental numbers in the area you want to purchase. Work out how much similar properties rent
Down the road, you may want to turn your residence into a rental property. If you’re house hacking as a wealth building strategy, this can be an attractive option, as it frees you from counting on growing equity.
House hacking can be a fun and unconventional way to start building wealth early in your life.
If you’d like to talk about the numbers further, or see some examples of properties that might
work well for house hacking, give me a call. I’d love to help you get started.
