4 Easy and Effective Ways to House Hacking This Year

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house hacking

Most people have heard about the term “house hacking”, infamously coined by real estate entrepreneur Brandon Turner. For those who don’t know about this term, it’s when you buy a property, live in one part of it, and rent out the rest—that way your tenants are paying all or a significant portion of your house mortgage.

House Hacking Crash Course

It’s a no-brainer that house hacking is the best way to generate money for people who are starting out their journey of achieving financial freedom. Here’s why:

  • It either reduces or completely eliminates one of your most significant expenses- your living expenses.
  • You create equity for almost free as your tenants pay down your house mortgage while the property appreciates (in most cases).
  • You save money in taxes, as you can reduce a portion of your house expenses.

Now that you know how powerful house hacking is and before you start making excuses on why you can’t do it – read this blog.

The below-mentioned forms of house hacking can work for most people – especially for those who live in the expensive locality. All you need to do is get a little bit creative.

This post has outlined the different types of house hacking strategies that can work for you. So let’s get started.

The traditional house hack

This is arguably the most famous and one that most people have heard of. This is when you buy a two or four-unit property using a low down payment house loan. The FHA loan is most popular here because the buyer has to make only 3.5% down payment. But you can find more, especially if you’re purchasing a home for the first time.

In this strategy, you live in one unit of the house and rent out the rest of the unit(s). The rent coming from your other units should either be covering all or most of your house mortgage. According to https://fibyrei.com/house-hacking-ultimate-guide/, this strategy is a great way to maximize privacy while also enjoying the advantages of house hacking. This strategy works mostly in low-priced markets.

In the high priced market, it’s tough to find a traditional house hacking deal that works because the house mortgage is too high. Additionally, the rent amount may not be enough to cover the mortgage and you might end up paying money from your own pocket that you may not like.

Making the living room your home & renting out the rest of the home

As said above in high priced markets, it’s tough to find a property where a traditional house hack works. So, here you need to be a bit creative.

A strategy that can work in expensive markets is that you can make the living room your home and rent out the rest of the portion. You can put up a room divider and a curtain in the living room and call that portion your bedroom.

This way, you’re renting most of your property portion and generating enough rent to pay the house mortgage.

Note: This house hack is best for bachelors or people living away from their family.

Renting by the room

This is another great strategy that many people are following and it works for most of the people. The idea here is to buy a large home that has at least four bedrooms and two bathrooms, and you can live in one bedroom and rent out the rest. Generally, you can make more money when you rent the house by room.

Additionally, buying a big family home opens up many financial options too. At the time of writing this blog, there are 1, 3, 3.5, and 5 percent down payment loan options on single-family houses. The low down payment option with increased rents can boost up your cash-on-cash returns.

Plus, single-family houses are known to appreciate faster than multi-family homes. This is because both non-investor and investors are interested in single-family homes, which means more demand, and more demand means higher prices.

Living in a Trailer/RV & Renting Out Your House

In this strategy, you need to buy a trailer/RV and use it as your residence and put your whole house on rent. By following this, you can increase your rental income and eliminate your housing expense—this house hacking strategy that works best for bachelors and young people.

Warning: This strategy is only for those hustlers who are more than willing to do whatever it takes to achieve financial freedom early.

Well, this strategy makes a lot of sense for young people living in expensive cities, Denver. By following this, they can completely eliminate their housing expenditure.


Out in the market, there are many different investing strategies that one can follow. But the house hacking is arguably the best strategy for people who are looking to increase their chances of getting the highest return on their investment.