You may have heard of hacking the internet, but how much do you know about "house hacking?"
Today's housing market isn't as easy for young millennials who are struggling to afford a home. Plenty of millennials need to live with roommates to cut costs, but there is a select group of young people who have found a way to live a low or no-rent lifestyle. These are the house hackers, and they could teach us a few things about saving money.
House hacking occurs when a multi-family rental property is purchased, and the buyer of the property lives in one of the rental units while the other units are rented out to tenants. The property can be any type--from duplex, to basements, to finished garages.
According to Forbes, house hacking is growing in popularity among millennials who can't afford expensive housing. They are drawn to this creative real estate investment strategy that works in their favor should they decide to purchase a property to "hack"--while a millennial lives on the property, the tenants pay for the house hacker's rent, mortgage, and more expenses.
House hacking comes in handy at a time when millennials are generally getting into homeownership much later than previous generations. This is often in part to mounting student debt--for 31-year-old Angeal Rozmyn, who lives in a purchased house with her roommate in a Seattle suburb, house hacking allowed her to pay off her loans in under four years. She says this would not have been possible had she been "having to spend money on all of [her family's] housing expenses."
At the same time, however, house hacking is a remarkable way for millennials looking to start up their own businesses. After all, operating a business out of their home allows millennials a wide variety of advantages. These include tax benefits and lack of a commute --no more sitting in traffic every morning and night. Home-based businesses allow house hackers to scale up or downsize at will, rather than having to work with the confines of a fixed office space size. Working from home also allows incredible flexibility of working hours, which is perfect for entrepreneurs who juggle many obligations at once.
Craig Curelop, who recently published a book called, The House Hacking Strategy, says it pays to be highly strategic if you are looking to pursue house hacking. The house you select should have the basic features and amenities renters value--you may have to forgo personal tastes in order to bring up profits. Furnish the home but don't spend too much money on design and remember that 62 percent of renters say they place more importance on the location than the unit itself.
Pick a property with a good location and you'll be well on your way to a successful house hack.