House hacking is a real estate investment strategy that involves purchasing a property and living in it while also renting out part of the property to generate income. There are several strategies that can be used to successfully house hack a property:
- Walk-out basement: One strategy is to purchase a property with a walk-out basement and rent out the basement as a separate unit. This can be a cost-effective way to generate income while still having a separate living space for yourself.
- Rent by the room: Rent out individual rooms in the property to multiple tenants. This can be a good option if you have a large property or if you are comfortable sharing common areas with others.
- Short-term or Mid-Term Rentals (STRs/MTRs): Use the property as a short-term rental through platforms like Airbnb. This can be a good strategy if you are located in a popular tourist destination or if you are comfortable with the added responsibilities of managing a short-term rental.
- Nomad: Another strategy is to use the property as a “nomad” rental, which involves living in the property for a year (or more) by yourself with the plan to scale to the next house and turn your current one into a rental.
- Duplex, triplex, quadplex: Another option is to purchase a multi-unit property, such as a duplex, triplex, or quadplex, and rent out the additional units. This can be a good way to generate a larger income and build equity in a single property.
- House and cottage: Purchase a property with a separate cottage or guest house and rent out the cottage while living in the main house. Or vice versa depending on how comfortable and profitable you would like to be. This can be a good way to generate income while still maintaining a separate living space for yourself.
- Garage conversion: Convert your garage into a separate studio apartment. By building a shower and a kitchenette you can turn your garage into an income-generating machine. Your biggest costs will probably be connecting to the sewer and getting water/electricity into the garage.
There are several strategies that can be used to successfully house hack a property. Sometimes all it takes to find a deal is looking creatively at a property and being willing to learn the nuances of a different strategy.