Let’s say you’ve been searching for a cost-effective or original way to purchase your first Brewer investment property. If so, house hacking might be the solution for you! House hacking is when investors buy a property with multiple rental units that either already exists or can be converted, live in one of the units, and then rent out the others to tenants.
The concept of house hacking is to use the rent your tenants pay to cover your mortgage and other property expenses, allowing you to live in your home for free while the property appreciates. Many people find it to be appealing, especially if you’re just getting started as a real estate investor. However, as with any investment, there are pros and cons to this strategy. Before you attempt house hacking for the first time, consider the following information.
House Hacking Basics
The practice of house hacking can provide investors with a variety of advantageous opportunities. Therefore, you may be surprised at how few individuals use this method to acquire properties. Without a doubt, if done properly, residing in your Brewer rental property can assist you in paying off your mortgage or rental bill, give your home time to appreciate in value, and provide you with a number of valuable tax benefits. This can help to reduce costs for future investments or use the equity in your rental property to reach specific investment goals.
Is House Hacking Right for You?
Although you have all these advantages, house hacking also has a few disadvantages.
The Reality of Landlording.
For instance, in exchange for practically living rent-free, you will invest a significant amount of time in leasing and managing your property. It’s important to remember that being a landlord should be taken seriously since it’s a real job. Most house hackers manage the bulk of the work required to own a rental property, unless you plan to have your property managed by a Brewer property manager professionally.
Living with Tenants.
You will live with your tenants if you decide to house hack, so keep that in mind as well. While you may not all reside in the same apartment, your tenants will be so close by that you will frequently interact with them and put up with their noise, pets, vehicles, and even personal property. When sharing such close quarters, it may be more difficult to maintain a professional relationship with your tenant, and if you find your tenants to be less than ideal neighbors, tempers could flare up. House hacking, however, might be a great idea if you don’t mind these arrangements or can secure a great tenant.
Desired Lifestyle.
Be sure to consider your willingness to live in an investment property as you brainstorm all the scenarios you might encounter as a house hacker. It’s typical for novice investors to start by picking properties that are less expensive. Ensure that you will feel comfortable living on the property if you intend to do so. Your initial investment property might not be your ideal home, which can frustrate some people. However, if you do not mind reducing your standard of living for a few years, house hacking may be the ideal way to get started in real estate investing.
Zoning Laws & Neighbors.
Your local zoning laws are the final thing you need to take into account. A residential property cannot be divided into two or more rental units in many places. Therefore, carefully review local zoning ordinances before making an offer. Even if it is legal, your neighbors may not approve of your plans to move multiple tenants into your new rental, particularly if there are few multi-family rentals in the area. Even though you have no control over how other people feel, you can try to reassure them by making an effort to get to know and communicate with those who live close to your rental property. A simple, pleasant conversation can go the extra mile to help your neighbors adjust to the fact that you and your tenant will be moving in next door.
Are you searching for the following Brewer investment property? Or would you like to discover more about how investing in real estate for rental purposes can be made simpler by using professional property management? Contact Real Property Management Acadia online today or call us at 207-561-7482. We work with investors like you to help build your dream rental real estate portfolio.
Originally Published on February 26, 2021
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