No one would say no when asking if you want to live for free? When real estate investment offers you multiple opportunities to live for free, why would you deny it? Yes, it’s true! You can begin the real estate investment while living for free technically. Perhaps as a landlord, you must look for property management software for online rent collection. The house hacking calculator seems to be the best strategy for real estate investment. The write-up will explain what house hacking is, how it benefits an individual, and how you can live for free by using the real estate investing technique.
What Is House Hacking?
House Hacking is a great investment strategy, especially for everyone and especially for beginners who want to acquire the ownership of multi-family homes. When you live in one of the multi-family real estate property units, it becomes your primary residence. Although, you can live for free by covering the mortgage payments and renting out the leftover investment property units to the renters.
People mainly use the house hacking strategy to get into the multi-family-investing, which can also be utilized when the primary residence is a single-family home. In such a situation, you will like to plan on investing in a single-family home or rent out a section of your homes, such as a basement or room, to flip for a profit. While you improve on the investment property, you can give it for rent to the renter to generate the cash flow.
The main motive for looking for house hacking is to live in one section of the property and house the rest to generate more income. Thus, if you plan to invest in a landlord-occupied rental property, you and the owner will live in the same place. The renters will pay for the primary residence, whether they are for short-term or full-time residents at your home. The strategy will work when you wish to live for free. Precisely it’s the best strategy that helps you develop your real estate investment portfolio. Hence, it is the basic concept behind house hacking.
Benefits of House Hacking
The benefits of house hacking are simply an answer to how to live for free with real estate investing. Following are the benefits one enjoys from the house hacking-
Real Estate Investment Experience
One can learn the insights of operating a rental property, handling tenants, and managing expenses. The process will be a smooth transition into the online rent collection business, including the investment by living in one of the rental property units. Even if you do not pursue a career in real estate investment, you can still learn the lessons from a property management software.
Cash Flow
The level of cash flow the real estate investors generate depends on the type of property you purchase. However, you can surely witness a positive cash flow with the right real estate investment. It’s a great strategy that allows you to save whatever is left over to cover the expenses. The cash flow paves the path for future investment along with building health.
Airbnb House Hacking
If you do not wish a tenant to occupy a section of your home, you can look for the other alternative, i.e., Airbnb. However, you can still have the cash flow by renting a home unit for a short period.
How to Live for Free: Getting a Good Mortgage
The financing option is another benefit of the house hacking calculator. The residential properties can cost you thousands of dollars. When you plan to purchase an investment property, you will like to get the best mortgage. You can always consider these loans when you want to get a mortgage like this.
FHA Loans
When you sign up with an FHA loan (Federal Housing Administration) for investing in a property, the down payment could be just 3.5%. Although, you must occupy the place for at least a year.
VA Loans
Veterans Assistance loans or VA loans have easy qualifications and attractive terms. However, these loans are only available for US military veterans.
Conforming Loans
The conforming loan conforms to the guidelines and rules set by Freddie Mac and Fannie Mae. However, these have larger down payment but offers low-interest-rate with a fixed mortgage rate.
Bottom line
To live for free, one also needs to consider some factors apart from loans. It includes utilities, property insurance, property taxes, vacancy rate, and monthly rental income. You can also use the house hacking calculator and property management software to invest in the right property when using the house hacking strategy to live for free.
