Let’s say you’ve been searching for a cost-effective or original way to purchase your first Goose Creek investment property. If so, house hacking might be the solution for you! House hacking is when investors buy a property with multiple rental units that either already exists or can be converted, live in one of the units, and then rent out the others to tenants.
The idea behind house hacking is to live in your home for free while the value of the property appreciates by using the rent your tenants pay to pay the mortgage and other property expenses. 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 you start house hacking for the first time, you must be aware of the following.
House Hacking Basics
Investors may benefit greatly from house hacking in a number of ways. Therefore, you may be surprised at how few individuals use this method to acquire properties. There is no question that, if executed right, residing in your Goose Creek rental property can assist you in paying off your mortgage or rental payment, give your property time to appreciate, and provide a number of superb tax advantages. 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. You should take landlording seriously because it is a real job. Most house hackers oversee the majority of the work related to owning a rental property, unless you desire to have your property managed professionally by a Goose Creek property manager.
Living with Tenants.
Another essential fact to remember about house hacking is that you will reside with the tenants. Maybe you won’t all live in the same unit, but your tenants will be so close that you will see each other frequently and have to tolerate their noise, pets, cars, and even personal belongings. Living so close together may make it more difficult for you to maintain a professional relationship with your tenant, and if you find your tenants to be less than ideal neighbors, tensions may rise. However, house hacking could be very successful if you don’t mind such arrangements or are able to find a fantastic tenant.
Include your willingness to live in an investment property when you’re planning all the potential scenarios you might encounter as a house hacker. New investors frequently start by picking properties that are less expensive. Ensure that you will feel comfortable living on the property if you intend to do so. Your initial investment property might not be your ideal home, which can frustrate some people. House hacking, however, might be the ideal entry point into real estate investing if you have no problem lowering your standard of living for some time.
Zoning Laws & Neighbors.
Your local zoning laws are the final thing you need to take into account. A residential property cannot be divided into two or more rental units in many places. Therefore, carefully review local zoning ordinances before making an offer. If there aren’t many multi-family rentals in the area, even if it is legal, you might find that neighbors are not happy with your plans to move multiple tenants into your new rental. 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 in search of your next Goose Creek investment property? Or would you like to discover more about how investing in real estate for rental purposes can be made simpler by using professional property management? Contact Real Property Management Charleston online today or call us at 843-900-4061. We work with investors like you to help build your dream rental real estate portfolio.
Originally Published on February 26, 2021
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