What the heck is house hacking? And how can it help you and your military family? In this episode of From Military to Millionaire, David Pere breaks it down.
What is House Hacking?
House hacking is purchasing a property with the intent to rent rooms or units to cover most of all of your mortgage payments. The most common method is to buy a duplex, triplex, or fourplex. You live in one unit and rent the others, which should cover or nearly cover your mortgage. Having roommates is another house hacking strategy if you buy a single-family home. You can also house hack by renting on Airbnb, renting out entire units or rooms in your house.
Are There Other Money Making Options?
Building an in-law suite next to your house is another option. Then you can either live in the house and rent the in-law suite or vice versa. The same is true for a motorhome that you keep on your property. You could even build a concrete slab on your property and rent it to someone who has their own motor home for extra income.
What Kind of Loan to Use
If you’re house hacking on your primary residence, you can use some of the lucrative loans offered to service members, like the VA Loan and FHA Loan. With these, you can buy up to a fourplex with very little money out of pocket and excellent lending terms. And you can do this over and over as you’re relocated while serving.
A Few Downsides to Mention
House hacking has some downsides, like living next to your tenants, and not living in the most ideal neighborhood or your dream home. The point is to set yourself up financially in order to live in your dream home later on. Also, choose when to house hack wisely. Analyze the market and the potential cash flow to decide if it’s a good idea.
Take Control of Your Financial Readiness
David Pere is a former active-duty Marine who is on a mission to educate the military community about financial readiness. Most people hear that term and roll their eyes, but Pere wants everyone to know that readiness can be achieved – without a lot of effort. He teaches personal finance and real estate investing to service members to help increase savings and increase their chances of achieving financial freedom.
Want to learn more about Pere? Check out the Military to Millionaire website, and connect with him on Instagram or Facebook. Subscribe to his YouTube channel here! Take a look at David’s book – The No B.S. Guide to Military Life here.
Looking for more ways you can be financially strong? Check out what’s new on our Mighty Money page.