House Hacking in Snohomish County to Combat Affordability Challenges
The affordability of homeownership has decreased dramatically in recent years with increased interest rates, and we understand the challenges this puts in the path of Snohomish County buyers. For many buyers, it means coming up with a new strategy to offset increased costs while still pursuing their real estate goals.
One of the best options for those who want to invest but need to reassess their budget is house hacking. We can help you find a duplex for sale in Snohomish County that makes this unique homeownership strategy work for you, so contact us any time.
Need to learn more about house hacking first? Keep reading.
What is house hacking?
House hacking is a creative real estate investment strategy that combines buying your own home with buying an investment property. Depending on who you ask, it can be defined a few different ways.
Some people call it house hacking when you buy a home and rent out a part of it to offset the cost of your mortgage. This might look like purchasing a single family home with 4 bedrooms, knowing that you will only need 3, and renting the 4th bedroom out to a friend.
In this post, we are talking about a more formal type of house hacking, in which you purchase a multi-family property like a duplex. The price of the duplex will likely be comparable to a single family home you might buy, but you will live in one unit while renting out the other.
What are the benefits of house hacking?
House hacking comes with many benefits. In many cases, the rental income from the unit or units you are not living in will mostly cover or even exceed the monthly mortgage payment. This means you are enjoying all the advantages of homeownership while having a lower monthly housing payment than you otherwise would.
This opens up a variety of opportunities for you. First of all, it offsets the affordability challenges created by increased interest rates and owning a home in one of the best places to live in Washington. Second, it means the money you would otherwise be spending on your mortgage payment can now be leveraged toward other investments or expenses.
House hacking also offers the benefits of owning a rental property with a lower level of risk. Most people find that their tenants are more likely to honor the lease agreement, pay on time, and be a generally good neighbor when their landlord is living right next door or even sharing a wall.
How does house hacking make owning a home more affordable?
In addition to the rental income, house hacking offsets the cost of homeownership in multiple ways. There is the immediate help of the monthly rental payment, but there is also the slowly appreciate asset.
When you buy a duplex or other multi-family home, you are working toward your investment goals from multiple angles. As the property appreciates, that building equity opens up options for you.
You can leverage that equity in the future to renovate the property, or pull it out in a cash-out refinance to fund the purchase of another property. This might be your future home, or another rental property. If you choose to move out of your unit into another home in the future, the rental income from your original property will dramatically increase to further fund your investments in the future.
Is it hard to get financing for a duplex?
Another benefit of house hacking in comparison to buying a typical investment property is the financing options. For many buyers, securing financing for a multi-family property like a duplex is actually much easier than qualifying for a personal home. This is because the lenders understand the lower level of risk associated when there will be rental revenue covering a large portion of the monthly mortgage.
What if I don't want to live in a duplex?
We get it, you might not have pictured a duplex as your first home. Keep in mind that if a duplex isn't your preferred place to end up, this can be a temporary solution, a stepping stone toward your ultimate goal. In fact, many people who start their real estate investing journey by living in a duplex and renting out the other unit find that they are far more successful in the long run. Even just a year or two in the duplex can set you up with the equity you need to fund your future goals.
Ready to learn more or begin searching for duplexes for sale in Snohomish County? Contact us any time.