Does Rent Hacking work better than House Hacking in most markets?

[Bryan T.]

Does Rent Hacking work better than House Hacking in most markets? I am wondering whether it is better to rent hack than house hack in most markets. 

[David Fernandez]

Hi @Bryan T.,

I guess that by rent hacking you mean leasing a house/apartment and sublease the rooms. Correct? If this is the case, make sure you are not in violation of the leasing agreement, most include a non-sublease clause. 

Also, the only benefit of rent hacking is that you may be able to live for free if you get your roommates to cover the entire cost of the lease. On the other hand, by house hacking you may achieve the same living for free scenario or let’s say that you are $100-$200 out of pocket, but you will also benefit from principal pay down (you gain equity with each mortgage payment), tax breaks, inflation (each year your rent may increase, while your mortgage payment stays the same), and appreciation (maybe). Also, when you move out, you can either rent the doce where you used to live for additional cash flow or sell the property and do not pay capital gains on the portion of the property that you used as your primary residence. 

However, as you said, this may be market specific and in some markets the purchase price is so high vs. rents that it may be difficult to House hack and make it worth it.