An interesting way to get your first Bellaire investment property is through house hacking. House hacking is when investors purchase a property that either has or can be converted into multiple rental units, live in one unit, and then rent out the others to tenants.
In a nutshell, house hacking is using the rent that your tenants pay to cover your mortgage payment and other property expenses. This means you would be living in your home for free while your property increases in value. This is a very attractive idea especially if you are just starting as a real estate investor. However, you need to know a few things before you pursue your house hacking plan.
House hacking can offer investors a range of great benefits. It is surprising that only a few people use this property-acquisition strategy. When done correctly, you can live in your Bellaire rental property, eliminate your mortgage or rental payment, give time for your property to appreciate, and enjoy some tax benefits as well. Still, house hacking is not for everyone because of a few downsides to the process.
In exchange for living virtually rent-free, you will be spending a lot of time leasing and managing your property. Being a landlord is a real job so you should take it seriously. Most house hackers don’t have their properties managed professionally so they end up doing most of the legwork involved in owning a rental property.
You also have to consider that house hacking means you are going to be living with your tenants. Yes, you won’t be sharing the same unit with your tenants, but they will be so close by that you have to put up with the noise, their pets, cars, and even personal belongings. It could be hard to keep a professional relationship with your tenant, and tempers could flare if your tenants turn out to be less-than-ideal neighbors. But if you don’t mind that kind of arrangement or you can find a great tenant, house hacking would be a great option.
One of the things you also have to consider before pushing through with your house hacking plan is your willingness to live in an investment property. A lot of new investors choose lower-priced properties at first. You have to be comfortable with the idea of living on the property. Your first investment property will likely be a far cry from your dream home, and this can be a source of frustration for some. If you have no problem scaling back your lifestyle for a few years, house hacking could be the perfect way to get started in real estate investing.
Finally, you need to consider the possibility of your tenants not being able to pay rental payments. Since you are the property owner, you are responsible for everything from the mortgage to the utilities. Although a lease helps encourage tenants to pay their share of the expenses, there might come a time when they are suddenly unable or unwilling to do so. You still need to be able to pay your property’s bills despite not having that source of income for at least a few months. Evicting a non-paying tenant could take a while, and so does finding a new one, so it would be best to start a cash reserve account early and keep topping it up every month.
Are you in the market for your next Bellaire investment property? Or would you like to learn more about how professional property management can make it easier to invest in rental real estate? The Real Property Management Affiliates team is ready and willing to help you. Contact us online today or call us at 713-539-5765. We work with investors like you to help build the rental real estate portfolio of your dreams.
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.