House hacking refers to the practice of making your house a revenue-generating asset. Traditionally, this means purchasing a small multi-family property and renting out part of it.

The money collected from the tenants is used to pay all or part of the mortgage. As such, the homeowner can build equity while maintaining their property.

When done correctly, you can easily live in an expensive house at a low cost. Some people can even generate a small income from their home ownership.

Another reason to consider house hacking is the favorable mortgage rates that come with it. Since you’ll live in one of the units, financial institutions will view the property as owner-occupied. As such, you can enjoy lower mortgage rates than you would if you purchased a commercial rental property.

Remember, though, that these financial benefits come at a cost. You must be ready to live in a multi-family home; however, you will have some control regarding the tenants who live there.

P.S. I am happy to help you with answers to any questions you may have about recently reduced mortgage rates.

Do you think house hacking is an effective strategy?