Ever considered house hacking?
The cost of housing has gone nowhere but up for years now.
And not just for one decade, forthree decades at minimum.
With a website calledNeighbor, your extra space — whether it’s a spare room, an empty garage or a parking space — could be earning you an extra $300 a month in totally passive income.
So you havent just noticed it or experienced it yourself where you live.
In every state and region housing costs have increased over time.
In some places, even more so since 2020 at a rate youve never seen before.
But there is hope.
Here is the secret of house hacking.
What Is House Hacking?
House hacking means finding ways to generate income from your home.
But what did they figure out?
What does house hacking actually look like?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
How Do I House Hack?
This is especially true if you are going to be away for a bit such as for the summer.
Say you have an average property going for $300,000 in your area.
The market rents are somewhere around $3,000.
As you’ve got the option to see, this is an ideal scenario to make a profit.
But lets take this to the typical extreme example.
Four-unit quadplexes, while rare, are the pinnacle of house hacking.
But why four units and not five or more?
Thats because theFederal Housing Administration considers four-unit properties to qualify as a home.
So you charge $2,000 per unit.
All because you bought a good investment.
Your best option is to search for a quadplex.
However, most municipalities zoning laws do not allow quadplexes.
A triplex can be just as rare and hard to come by.
Unfortunately, most people do not have enough cash to buy a property outright.
But if you do, house hacking becomessignificantlyeasier.
Mortgages are the typical way people will buy a house to house hack with.
Conventional mortgages may be surprisingly easy for you to get.
These loans are often through private institutions like a bank or credit unions.
There may be some hold-ups since certain houses will not make the cut and from general government slowdown.
The house must also be yourprimary residence,and the loan requires a special punch in of mortgage insurance.
If you feel like you have no other options, this is a great loan to look into.
VA Loansare great for those who are associated with the military.
USDA Rural Development loansare probably the most surprising loan that can help you.
These loans provide a surprising array of options.
And rural does not have to be backwoods in Appalachia.
In thismap of their loan applicability, it’s possible for you to see areas that are eligible.
Nearly the entire state of Delaware is eligible, for example.
Atypical House Hacking
There are atypical ways to house hack.
Lets say you bought a regular single-family home.
It has two floors, maybe a basement, three bedrooms, and two bathrooms with showers.
If you bought this all for yourself, it might be overwhelming.
You basically just need access to people you would consider letting live in your house for a bit.
In one simple swoop, you have now halved your housing costs.
Another atypical way to slash your housing costs is via your job.
This is absolutely not for everyone.
Whether its out of shame, safety or shackling.
Good luck house hacking!
Dennis is a civil engineer turned freelance writer with a passion for personal finance.
you could find Dennis over at colossicus.com between his freelance ventures.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
