Being the author of a house hacking book, I get asked questions about the strategy a lot.
In this article, you will find answers to the most common questions I get about house hacking. Use the table of contents below to navigate quickly to the specific question you’re interested in.
Is house hacking a good idea?
It can be a good idea for the right person if it’s implemented the right way (the right property, enough reserves, being a good landlord, etc.) and the person understands the risks they’re taking. Read the next question below to see more about the risks
Is house hacking risky?
Some people think house hacking is risky, others don’t think it is. It really depends on your risk tolerance and how you implement the strategy.
That said, often times a house hacker has a larger mortgage when house hacking than they otherwise would. If the tenant doesn’t pay, this could leave you in a tough situation financially since you’ll be responsible for the full mortgage. This is the reality for nearly any real estate investment with a recourse loan, though, not just house hacking.
How many times can you house hack?
There is no limit on the number of times you can house hack, but you have to plan which types of mortgages you’re to use and when, as you can only have one FHA loan at a time. You may also run into a limitation of how many personal mortgages you can have in your personal name (roughly 10) and/or how much your income can support.
How long do you have to live in a house hack?
You have to live in a house hack for one year (12 months). There are exceptions to this, but generally speaking, it’s 12 months.
Can you house hack a single-family home?
Yes, you can house hack a single-family home by renting out the extra bedrooms you’re not using. It can be more difficult to get approved for this mortgage since the bank won’t include the rental income from the bedroom tenants like they would from multifamily units for a house hack.
Is house hacking realistic?
Yes, house hacking is absolutely realistic. There are thousands and thousands of people across the world who are house hacking right now. In fact, I am one of them. I am house hacking a duplex.
Is house hacking smart?
House hacking can be smart if it fits your goals and your financial situation. It’s not right for everyone or in every situation, there are reasons why you shouldn’t house hack, but for many, it is a smart decision.
What is the benefit of house hacking?
The benefit of house hacking is that it can reduce your personal living expenses, provide you tax benefits, and help you learn how to invest in real estate.
Is house hacking exploitative?
No, house hacking is not exploitative, as long as you run it professionally and respectfully, including providing a safe and clean place to live for your tenants.
Does the 1% rule apply to house hacking?
The 1% rule generally isn’t used for house hacking, but if a house hack deal meets the 1% rule, it is likely going to be a good deal for this strategy, too.
Can you BRRRR a house hack?
Yes, you can BRRRR a house hack. You can do this by renovating the units in your house hack, then refinancing the property to get your cash back. You can also BRRRR a house hack by using the live-in-flip strategy.
Is it possible to house hack in NYC?
It is definitely going to be harder in NYC than other parts of the country, but it is possible to house hack in NYC.
Can you house hack in Canada?
Yes, you can house hack in Canada. We’re mainly focused on the US here at Money Office Hours, but we do know it’s certainly possible in Canada, as well as other parts of the world. The specifics on your mortgage and other nuances will differ, but it’s likely fine to rent out a portion of your property to cover your mortgage, which is what house hacking is.
Can you house hack with an FHA loan?
Yes, you can house hack with an FHA loan. In fact, an FHA loan is often the best loan to house hack with if you’re buying a multifamily property.
Can you house hack in 2023?
Yes, you can house hack in 2023. The higher interest rates we’re seeing in 2023 certainly make it more difficult for the numbers to work, but it is still possible.
Is house hacking real?
Yes, house hacking is real. Very real.
What is the best book on house hacking?
I’m biased, but I think the best book on house hacking is The Everything Guide to House Hacking. Craig Curelop’s book The House Hacking Strategy is also a great book.