Did you know that it is possible to live for free without paying a single penny on rent or mortgage? If this interests you, read this post till the end. You will finally be able to buy or rent your own home and live for free.
Most people work super hard at their jobs and spend more than 30 percent of their income either on rent or mortgage. This is gruesome as they are left with very little money and their standard of living drops because they made a wrong financial decision.
Contrary to popular belief, it is not okay to make such mistakes at a young age. You might get caught up in a vicious cycle of working for a paycheck and spending it on things like rent, mortgage, house maintenance, electricity bills, insurance, etc. What if I told you there is a technique that lets you live for free, that too, in your desired home. This technique is called as House Hacking.
What is House Hacking?
House Hacking is buying a multi-unit home(duplex, triplex, or fourplex) with one unit for yourself and renting out the spare units to families to cover all your property expenses like mortgage/rent, electricity bill, maintenance, etc. You do not have a pay a single penny from your pocket.
I know what you are thinking. This seems too good to be true. As an investor, you are taking a financial risk by renting or buying a property that is too big for a single guy to live in. But the risk is nothing compared to the rewards that you will get. You can literally buy that house for free and continue to make money off the rent coming in from spare units.
Will I get any tax benefits and deductions from House Hacking?
As you are going to be the primary resident of your house(plus the other tenants), you can deduct one-fourth of the mortgage interest and property taxes that you be paying for your multi-unit home. Moreover, you can also make deductions in premiums that you pay for your private mortgage insurance.
Great opportunity to become a real estate investment at a young age.
Liabilities like student loans and credit card debt are enough to burden wannabe investors to turn back to their day jobs and forget about becoming a real estate investor. House hacking allows a young person(with student loans) to take calculated risks and enter into the competitive field of real estate investment. You don’t have to be an expert in finance, hire a Certified Public Accountant (CPA) to help you do your taxes and also make better financial decisions.
No one is asking you to live off the grid in an RV or buy a tiny home. What makes the technique of House Hacking awesome is you don’t have to change your current lifestyle. In fact, with all the extra money coming in from your house occupants, you can upgrade your lifestyle of even put it in your savings account and let it grow slowly and safely.