1. Reading this BP article (https://www.biggerpockets.com/real-estate-investing/house-ha...) and it says the below. I thought you had to live there as your primary residence to house hack. So how can you house hack without living there? Or, is the distinguishing point that you just have to live there as your primary residence to get the owner occupied financing? (The below is a snippet from the BP article):
Can I House Hack Without Living There?
Yes, you can house hack without living there. While traditional house hacking involves renting out a portion of your primary residence while you live in another part, there are alternative methods such as short-term rentals to generate income without residing in the property.
2. Since there are tax benefits to house hacking, can a mother house hack with her child and save money by deducting a portion of the housing expenses and depreciation expenses?
If you are using financing to get the house, you will sign a note (promise to pay the loan back) asserting that the residence will be your primary home for the first 12 months. The lender has the right to call the loan due if you are not living there as stated on your loan application. The "hack" here is that owner occupiers have lower down payment requirements and lower interest rates than investors do.
During your first 12 months of living in the house, you can rent out a room (to a roommate or on Airbnb). After the first 12 months, you can move out without any penalty and rent out the house as a short-term rental (assuming your local municipality doesn't prohibit this), mid-term, or long term. When you move to your next property, you get to keep the owner occupied interest rate.
If you are renting out a portion of your home, then you should be able to write off some of your expenses. I rent out part of my home on Airbnb, and write off a percentage of the utility bills. (The % is equal to the square footage of the rental space in my house). For things that are 100% attributed to the Airbnb, such as furniture and supplies that I provide to guests like shampoo and coffee, I write these off in full. Please check with your CPA, they may advise you differently.
I'm a licensed real estate agent in Philly. I work with investors to find their next investment property. When you are ready to house hack, please let me know!