How To Live Almost Rent Free Without Moving To An Apartment

House hacking is designed to offset the downsides of homeownership, allowing readers to live for free. This is accomplished with income, equity appreciation or both. There are a few different ways to look at it:

• Equity House Hacks
• Cash Flow House Hacks
• Blended House Hacks

Equity house hacks rely on equity appreciation, either forced or organic. Live in fix and flips fall into this category. There’s no income component here, though, as with any house flip.

Cash flow hacks are the opposite, as all emphasis is placed on income and equity growth is disregarded.

Most will require a blended house hack that offers significant income potential and offers substantive appreciation rationale.

Asset Class

Multifamily hacks are not advisable. The level of competition is simply too high and investors are going to pay more than you think the property is worth. Not looking to compress your lifestyle or live in a 800 square foot apartment above a tenant? In search of comfort and luxury?

Multifamily is out then. Single family asset class doesn’t always provide the necessary income assistance. Now what?

Multi Generational Floor Plans

The idea is a simple one. The main home is supposed to offer the necessary privacy to tenants of all generations, so that the owner can maximize their earning power. There are other advantages to be enjoyed, though. First of all, the home is still considered a single family residence, which allows buyers to enjoy favorable mortgage terms.

Related: 7 Tips To Assist Long Distance Landlords

Secondly, the pool of buyers will be much larger than for a duplex. Understanding your exit is crucial. These types of steps allow for more exit strategies. Homes with lots of amenities that are located in prime areas offer upscale options worlds apart from the duplexes in the region.

What Are Your Financial Guidelines?

If you wish to scale up at your new location, you need to decide on your desired burn and where you will reside within that submarket. A submarket with quality school systems and potential market growth is in your best interests.

Or maybe you want a fireplace. Or a backyard swimming pool. Or marble counter tops. Or construction from a certain period. No matter what lifestyle are you looking to lead, you need to establish your financial guidelines early.

Finding The House

All options must be considered and multiple offers may need to be made. You may even need to wait the process out until the ask has been lowered. The specifics will vary from person to person but the results are what is most important.

The end result should be the same across the board: living in a luxury home, free of onerous rental complications. Some may decide to go with a short term rental option to achieve this goal and step up their cash flow.

Related: How To Prepare Properly Before Buying Your First Property

It takes a great deal of thought and market research to make a final decision. Reasonable expectations for average monthly cash flow are also necessary. Some months may have a lesser cash flow and some may produce much more. Decide on a desired monthly burn and stick to it.

It’s All About Life Design

As long as your choice produces income, you can have anything you want. Wish to live in a nicer room, where things are more economically diverse and the sun is always shining? This option is available to you, while still cutting down on your monthly financial obligations.

In Conclusion

A remotely decent apartment cannot be had on the cheap. To improve your quality of life and keep your burn down, you are going to have to do the necessary research. Real estate investment is not about striking quickly. It is about taking the time to properly play the game.

Those who are able to successfully manage a portfolio of rentals have handled tasks like this one in the past. For example, a down payment of 25 percent is typically needed for the typical home purchase.

Related: Debunking The Sweat Equity Myth

Meanwhile, those who adhere to the multi-generational floor plan can receive an investment property that essentially comes with the house, at literally no added cost. No added down payments are required, except for aside for the 5% necessary for a Fannie Mae note. An owner/occupant purchasing a single family dwelling is eligible for this awesome form of financing.

The same income is generated, without the same hassles and headaches and with the right choices, you can class your life up with a luxury house hack of your own.