What Is House Hacking In Real Estate? | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #hacker

3. Explore Loan Options

Whether you’re renting a room above your garage, a small outbuilding on your property, or the other half of the duplex you live in, the key advantage as a house hacker is the type of loans available to you.

When you purchase a home for yourself, you have the ability to use owner-occupied mortgages such as VA loans or FHA loans. These allow you to close with 3.5% down and in some cases 0% down. This is much more advantageous than when you purchase an investment property that you don’t occupy — in that scenario most lenders require at least 20% – 25% down.

4. Make Any Renovations Or Repairs

The time to do renovations and repairs on the rental space is before you take on a tenant. It’s much easier for you and any contractors you hire to work on the rooms without the clutter of furniture and other possessions. In order to charge a higher rent and increase the chance your tenants will stay for a longer time, the space should be functional (appliances and plumbing work) as well as aesthetically pleasant (fresh paint, clean, bright).

5. Find Future Tenants

The ultimate point of house hacking is to have monthly income from paying tenant(s). However, having no tenant is better than having a bad tenant. After all, you will be sharing a property, perhaps even a wall or shared common spaces with this person. Remember, the best tenant is quiet, pays their rent on time and stays for a long time.

So, it’s important to screen tenants before they move into your home. The process of screening can be as involved as you want it to be. But it’s critical that you have some form of screening in place to work with tenants who will be a good fit for your space. A few common steps include hiring an agency for background checks, running a credit check, and verifying the income of a potential tenant.

You can have an informal interview where you ask about the hours the person keeps, if they plan to have visitors, etc. The fewer surprises the better. Once you have found a tenant who passes your screen, you should draft an official lease. Make sure that the lease is signed before the tenants move into your space.


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