Living costs can quickly add up. One of the easiest ways to cut down on these costs and to boost your investments is by cutting your real estate costs with a house hacking strategy. With this strategy, you purchase a single family home, ideally with a low payment loan. Then, you live in part of the house and rent out the rest of the house. Here, the goal is to cut your real estate costs. Using this strategy, you can increase the amount that you save, and your savings can help tackle other investment priorities. With this strategy, there are ways to cut your real estate expenses.
Partial Reduction on Expenses
One way to cut real estate costs is to have a tenant to reduce your monthly payments. Usually, the owners will have an extra bedroom so that they can take on a roommate. Consequently, this helps them cut down their monthly costs by 25-50%. This is perfect for those owners who do not have a lot of extra space.
All Expenses Covered
The second way that owners cut down on real estate costs is by aiming to have all of their costs covered by their tenants. One easy way to balance your passive income and monthly costs is to rent out more than one bedroom, if you have the space. If you only have one extra bedroom, instead of renting it out to one tenant, consider using Airbnb. Indeed, taking on short-term rentals is a great way to make enough extra income to completely cover your costs.
Generate Extra Cash and Cover Your Real Estate Expenses
This strategy requires a lot of deliberate planning and work, but the effort to free up cash for other real estate projects can be worth it. If you use a low down-payment conventional loan to purchase a multifamily building, you can live in one unit and rent out the other units. By renting out your additional units, you can potentially covering all of your monthly costs. Even more, you might generate additional income to cover your other real estate projects.