Use House Hacking to Buy Your First Home in This Market

Use House Hacking to Buy Your First HomeIf you're concerned about current market conditions and how to make buying your first home affordable, you might want to consider house hacking. This is a strategy that allows buyers to reach their goals at a far lower monthly price, also setting them up to get into other real estate investments. 

Here's what you need to know about house hacking as a strategy to buy your first home in Columbus

What is house hacking?

House hacking is a way to combine investing in an income property and buying a home for yourself, offsetting the cost of both by intertwining the two. It can be an excellent way for first-time homebuyers to enter the market, as it combines the benefits of homeownership with the financial advantages of real estate investment.

House hacking typically involves one of several approaches:

  1. Multi-Family Properties: Purchasing a duplex, triplex, or fourplex and living in one unit while renting out the others. The rental income from the other units helps cover the mortgage and other expenses.

  2. Single-Family Homes with Extra Space: Buying a single-family home with a basement, garage apartment, or additional bedrooms that can be rented out. This can include renting to roommates or using platforms like Airbnb for short-term rentals.

  3. Accessory Dwelling Units (ADUs): Adding a separate living space on the property, such as a guest house or a converted garage, and renting it out.

Home sale expert Bill Gassett of Maximum Real Estate Exposure gave us helpful insights on how to enter the world of homeownership.

One of my life accomplishments was buying my first home at the early age of twenty-three. I not only got to own my own home at a very young age but I also custom built the home. One of the things that was an immense financial help was finishing the basement with an in-law suite. It has a full kitchen, family room, and bedroom. I was able to rent this space which made paying the bills much easier. I also rented out a couple of additional bedrooms. This is something any buyer can do to making owning a house far easier financially.

For those who don't like the thought of living with others, another viable option is buying a multi-family. It is a great way to not only become a homeowner but to get a taste of what an investor is like.

Benefits of House Hacking

If you haven't considered it before, house hacking may sound like taking on a lot at once. As you explore the benefits of house hacking, it will begin to make sense that this strategy has grown in popularity in recent years. 

The primary benefit of house hacking is the significant reduction in monthly living costs. By using rental income to cover a portion or all of the mortgage payment, homeowners can drastically lower their housing expenses. It may be the factor that takes you from not being able to afford to buy a home to being able to afford one comfortably. 

Additional income from tenants can be applied directly to the mortgage, enabling homeowners to pay off their loans faster. This can lead to substantial savings on interest over the life of the loan.

Alternatively, that monthly income can be leveraged toward another investment property or freeing up your budget to allow you to have the lifestyle you want (like allowing one partner to become a stay at home parent, funding your living expenses as you start a business, or any other big financial change).

House hacking also provides firsthand experience in property management, tenant relations, and real estate investment strategies. This knowledge can be invaluable for those looking to expand their investment portfolios in the future. It's usually a great first experience, where you can expect your tenants to be more complaint with the lease agreement knowing their landlord lives on site. 

Some buyers love the way house hacking offers flexibility in living arrangements. If life circumstances change, such as a job relocation or family growth, homeowners can convert their home into a full rental property, generating additional income while they move elsewhere.

Finding a Property for House Hacking in Columbus

The most common property type for house hacking is a duplex. It is appealing because you will have your own home to live in, with just one other residence to manage. The purchase price is also usually quite affordable, with only a slight increase from a comparable single family home. While you can certainly choose a different type of property, like a triplex, a house with a detached apartment, or even a house where you'll rent out some of the home to a tenant, a duplex is often the top choice. 

As you explore your options and determine what's best for your lifestyle and budget, we are here to help you find the properties that fit the bill. 

Want to learn more about homes for sale in Columbus to work toward your house hacking goal? Contact us any time. 

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