If you're just getting started with real estate or personal finance, you might have heard of something called house hacking. It's a powerful strategy to reduce your living expenses, generate income, and even start building wealth. The best part? You don’t need to be rich or a real estate expert to get started.
Let’s break it down step-by-step.
? What is House Hacking?
House hacking is when you buy a property and live in one part of it while renting out the other parts to cover your mortgage and expenses. Think of it as turning your home into a money-making machine.
You can house hack with:
A duplex, triplex, or fourplex (live in one unit, rent the rest)
A single-family home (rent out bedrooms or a basement)
A home with a garage apartment or accessory dwelling unit (ADU)
? Why House Hacking is a Smart Strategy
House hacking has become popular because it offers three major benefits:
Live Cheap or Free – Rent from tenants can cover your mortgage, utilities, or even turn a profit.
Build Equity – You're paying down a mortgage and owning more of the property each month.
Start Investing with Low Risk – You live in the home, so you’re involved and can manage it easily.
? Real-Life Example
Let’s say you buy a triplex for $300,000. You live in one unit and rent out the other two for $1,000 each. Your monthly mortgage is around $1,800.
Rent from the two units: $2,000
Mortgage: $1,800
Cash Flow: +$200/month + living rent-free
Pretty amazing, right?
? How to Start House Hacking
Here’s a simple roadmap:
1. Know Your Budget
Talk to a mortgage broker or use online calculators to find out how much you can afford. Look for owner-occupied loans like FHA or VA loans, which have lower down payments.
2. Choose the Right Property
Search for multi-unit properties, homes with separate entrances, or those with extra bedrooms. Location matters—look for areas with strong rental demand.
3. Run the Numbers
Estimate rent, mortgage, property taxes, insurance, and maintenance costs. Make sure the rent from tenants covers most (or all) of your costs.
4. Get Pre-Approved and House Hunt
Once your finances are set, work with a real estate agent who understands house hacking.
5. Screen Your Tenants
Use background checks and lease agreements. Even though you live there, treat it like a business.
? Common House Hacking Mistakes to Avoid
Overestimating Rent – Check actual rent prices, not just online listings.
Ignoring Maintenance – Always budget for repairs and vacancies.
Living with Bad Tenants – Never skip screening, even if you’re desperate.
?? Who is House Hacking Good For?
Young professionals
College students
Couples or families starting out
First-time homebuyers wanting to build wealth early
? Final Thoughts
House hacking isn’t just a way to save on rent—it’s a stepping stone to financial independence. By reducing your biggest expense (housing), you can save, invest, and even buy more properties in the future.
So if you're looking to get ahead financially, start small and think smart—house hacking might be the smartest move you make this year.
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