Let’s say you’ve been searching for a cost-effective or original way to purchase your first Bellaire investment property. The solution may lie in house hacking in that case! When investors buy a property that already has or can be converted into multiple rental units, and live in one of them while renting out the others to tenants is called house hacking.
Using your tenants’ rent to pay your mortgage and other property costs is the idea behind house hacking, which allows you to live in your house for free while the value of the property appreciates. It is an appealing concept, particularly if you are just starting as a real estate investor. But like all investments, this strategy has advantages and disadvantages. Before beginning your first house hacking attempt, consider the following information.
House Hacking Basics
Investors can benefit greatly from a variety of house hacking strategies. The fact that so few people choose to use this method of property acquisition may therefore surprise you. There is no doubt that, if done right, living in your Bellaire rental property can enable you to cover your mortgage or rent, give your property time to increase in value, and provide excellent tax benefits. This can assist you in setting aside cash for potential investments or utilizing the equity in your rental property to meet some of your financial objectives.
Is House Hacking Right for You?
Along with these advantages, there are a few disadvantages to house hacking.
The Reality of Landlording.
For example, you would have to invest a lot of time in leasing and property management in exchange for living virtually rent-free. A real job that you should take seriously is being a landlord. Unless you intend to have your property professionally managed by a Bellaire property manager, the majority of house hackers manage the bulk of the work associated with owning a rental property.
Living with Tenants.
Keeping in mind that you will live with your tenants is another crucial aspect of house hacking. Even though you might not all live in the same apartment, you will likely see your tenants regularly and have to put up with their vehicles, pets, noise, and even personal property because of how close they are to you. 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. However, house hacking could be very successful if you don’t mind such arrangements or are able to find a fantastic tenant.
Make sure to account for your willingness to live in an investment property as you consider all the scenarios you might encounter as a house hacker. It is usual for first-time investors to opt for less expensive properties. Make sure you will feel comfortable living there if you intend to live there. Some individuals may experience frustration if their first investment property is not their ideal residence. 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. It’s against the law in many places to divide a residential property into two or more rental units. So be sure to thoroughly research local zoning laws before making an offer. Even if it is permitted, you might discover that your neighbors are not happy about your plans to relocate multiple tenants into your new rental, especially if there aren’t many other multi-family rentals in the area. While you cannot control how other people feel, you can attempt to reassure them that you will be a responsible landlord by meeting and speaking with those who live nearby. An informal chat with your neighbors can go a long way toward assuaging their concerns about you and your tenant moving in next door.
Are you searching for the next Bellaire investment property? Alternatively, are you interested in finding out more about how investing in rental property can be made simpler by professional property management? Contact Real Property Management Affiliates online today or call us at 713-429-0411. We work with investors like you to help build your dream rental real estate portfolio.
Originally Published on February 26, 2021
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.