Assume you have been searching for a cost-effective or ingenious method to purchase your first Fort Lee investment property. House hacking could be the solution in that case! House hacking is when investors acquire a property with several units or that can be modified to have several units, live in one unit, then rent the remaining units to other tenants.
The concept of house hacking is to use the rent your tenants pay to cover your mortgage and other property expenses, allowing you to live in your home for free while the property appreciates. Especially if you’re just beginning as a real estate investor, it’s an attractive concept to many. This strategy, however, has benefits and drawbacks, just like all investments. Before you attempt house hacking for the first time, consider the following information.
House Hacking Basics
House hacking can provide investors with a variety of excellent benefits. Therefore, you may be surprised at how few individuals use this method to acquire properties. There is no doubt that, if properly done, living in your Fort Lee rental property can help pay your mortgage or rent, give your property time to increase in value, and provide excellent tax advantages as well. Using the equity in your rental property can help you achieve some of your financial objectives or save money for future investments.
Is House Hacking Right for You?
There are some drawbacks to house hacking that come together with these advantages.
The Reality of Landlording.
For instance, in exchange for practically living rent-free, you will invest a significant amount of time in leasing and managing your property. Being a landlord is a legitimate vocation that you must take seriously. Most house hackers oversee the majority of the work related to owning a rental property, unless you desire to have your property managed professionally by a Fort Lee property manager.
Living with Tenants.
You will live with your tenants if you decide to house hack, so keep that in mind as well. Maybe you won’t all live in the same unit, but your tenants will be so close that you will see each other frequently and have to tolerate their noise, pets, cars, and even personal belongings. Living so close together may make it more difficult for you to maintain a professional relationship with your tenant, and if you find your tenants to be less than ideal neighbors, tensions may rise. House hacking, however, might be a great idea if you don’t mind these arrangements or can secure a great tenant.
Be sure to involve your desire to live in an investment property when you consider all of the potential scenarios you may face as a house hacker. It is common for novice investors to begin with low-priced properties. If you intend to live on the property, you must ensure that you will be comfortable there. For some, the fact that their first investment property is not their dream home can be a source of frustration. However, if you have no problem reducing your lifestyle for a few years, house hacking could be the ideal way to enter the real estate investment market.
Zoning Laws & Neighbors.
Local zoning laws are the final factor to consider. Creating two or more rental units on a residential property is against the law in many places. Therefore, prior to making an offer, you should thoroughly examine local zoning regulations. Even if it is legal, your neighbors may not approve of your plans to move multiple tenants into your new rental, particularly if there are few multi-family rentals in the area. Although you have no control over how other people feel, you can try to reassure them by making an effort to interact with and speak to those who live close to your rental property that you will be a trustworthy landlord. In order to make your neighbors feel better about you and your tenant moving in next door, a short, friendly conversation can go a long way.
Are you searching for the following Fort Lee investment property? Or would you like to discover more about how investing in real estate for rental purposes can be made simpler by using professional property management? Contact Real Property Management Concierge online today or call us at 201-514-1603. We work with investors like you to help build your dream rental real estate portfolio.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.