House hacking is a term you may have heard in passing at some point, but what does it really mean?
In short, it’s something you can achieve when you have a property that’s earning income. The goal of house hacking is to lower your monthly costs so you have an asset that’s appreciating in value every single year, and you’re receiving the required payments as rent from other tenants.
That money is going to pay your taxes, mortgage, insurance, and any other expenses related to owning the property. Essentially, you’re trying to reduce your costs to zero, or even generate positive income once your expenses are paid down. That means you get to live a better lifestyle because you have more cash flow!
This is a super interesting way to get into real estate investing, especially when you’re first starting off or if you’re younger. You might only have a five percent down payment, which means the carrying cost might be a little bit too large for you on your own. But if you consider going a little bit further out from the city center and getting something with more bedrooms, you can get a couple of roommates together and actually generate income that way.
We’ve seen it happen again and again, especially in the US: investors with one property go to two or three, and all of a sudden they have seven properties. All the while, they realize it was never that much of a financial crunch because they were filling each property with rental income!
So, as long as you can cover a minimal down payment, that’s one of the easiest ways to start your real estate portfolio.
Want to learn more about breaking into the property investment market? We have answers! Reach out to our team for a chat anytime.