House Hacking In 2022: Is It A Good Idea?
The rental income option many are considering one of the easiest strategies the get rich in the new year.
House hacking is very popular nowadays. Many are doing it with successful outcomes and the lucrative alternative is being promoted to newbie investors as a lowkey risk option to invest in real estate. House hacking is mainly being able to rent portions of your home for a profit to help cover expenses. According to forbes.com home sales prices are continuing to rise but compared to a year ago, sales have decreased. But surprisingly, rental rates have increased dramatically after covid lockdowns came to an end which could increase home sales in 2022.
In the beginning house hacking was a great way to slash your housing costs or as many would say, to live for free but in the past decade, house hacking has been on the rise with no sign of slowing down. Why own one asset when you can own two or three to increase your cash flow. Savvy investors advise that you can start owning assets by purchasing affordable homes at the beginning that are in your price range then gradually invest in more luxurious-looking houses. The more bedrooms the better.
Is House Hacking For Me?
House hacking is highly recommended to those looking to earn a passive income and it’s considered a valuable option as a means to retire early. It's all about being able to generate a cash flow to cover all your monthly expenses, this method can also generate additional revenue to build your wealth. Successful house hacking depends on location and security. It does have a lot of benefits but there are also other details to consider first before deciding if this is the best option for you.
First of all, experts recommend having savings for a down payment as well as reserved funds to be able to handle emergency repairs and vacancies. Knowledge of rental laws is required plus the payment uncertainty to cover costs such as mortgage payments and utilities etc. may add up to your concerns. You may also want to consider your availability as tenants may need assistance at any time of the day.
This is the reason it is important to first get into the investor mindset to take steps to start creating wealth through this method. It’s important to want to learn the skills required to become a successful real estate investor and the courage to dive into this adventure which is considered a safe way to financial freedom.
It starts with improving your credit score to be eligible for a good mortgage and of course a stable income. Improving your credit score is not hard according to experts, all you need to do is to master your finance. Once you’ve completed this step, a trustable agent and a lender are recommended to go over all your options to have an idea of how your monthly expenses would look like. At the end of the day, house hacking is a simple concept but you’ll need to be totally invested in this project if you want it to be successful.
Get started today by setting up a 15 minute call with Residential Real Estate Expert, Real Estate Investor, and our very own House Hacker, Ri Prasad by clicking here.