House Hacking Guide

*Disclaimer: This house hacking guide is not financial advice, please do your own research prior to attempting.

What is House Hacking?

Unless you have been living under a rock then you have possibly heard of this. There are many different parts to it and it can really fit any household and any country really. The basic idea is that tenants, subletters, or travelers pay for your housing costs or at least mitigate the costs. This is especially important considering that housing is the most expensive part of most people’s budgets. So finding a way to cut these costs can help you reach financial independence faster!

How can I apply House Hacking?

  1. If you own a multi-family home like a duplex, then you can live in one and rent the other. In this way, the rented portion can help pay the mortgage on the property.
  2. Own a single-family home. If you have multiple bedrooms, then you can rent those out or you can AirBnb it out. I have seen many Boomers doing this after their kids have moved out, and it also helps sometimes to have others around. This is especially true since we are a social species.
  3. Additional housing units on your property. For instance, you can build an efficiency in an unfinished garage. This pretty much makes your home into a multi-family home somewhat. This method can be applied if you have an in-law suite or guesthouses on your property.
  4. If you are a renter, check out if you can sublet your home. This is especially true for those 1 bed and studio apartments.
  5. Rent your parking spot. If you live in a metropolitan city (e.g., London, Stockholm, NYC) it can be a hassle to have a car. However, if you live in a desirable area, are given a parking spot and do not have a car, then go for it! Actually, when I was I was in undergrad, I used to pay to park at a colleague’s house near campus since it was cheaper than buying a parking pass.

A side hustle for students – USA

Before I moved to Sweden I considered how would I pay for a Ph.D. if I remained in the U.S. As a banker I had a lot of up-to-date information on mortgages, the lending process, etc. I realized I could get a first-time home buyer loan and only have to have a down payment of 3%. Ultimately, I would recommend having a larger down payment since it would lower your monthly mortgage costs and if you manage to get it over 20% you do not have to worry about the PMI (private mortgage insurance).

I realized that I could house hack my way to at least cutting the cost of my housing while I did my Ph.D. I could either buy a house and rent out the rooms to other students or purchase a duplex. You would have to figure out if this would work for you since being a landlord and going to school might not be feasible for everyone. However, in the long run, especially for those considering student loans or have minimal grants and scholarships. Lowering your housing costs to nearly 0% of your monthly living expenses would set you up in the long run for success. Just my two cents.

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