Should you house hack?

Are you a hacker? How about a house hacker? Never heard of it? We’re not surprised. It seems like a relatively new term. We purchased a two-bedroom house with two bathrooms, spread over three levels, with a finished basement, and lived in the basement while renting the two rooms on the upstairs level to pay the mortgage. It was a risk, and it would have paid off, had the great housing bust of 2008 ruined 33% of the home’s value. It took 10-12 years to get back to the early 2000s value, and we sold while it had not fully recovered. A very expensive lesson!
However, now house hacking might mean things other than having direct roommates. It could mean using a basement for airbnb, especially if there is any part of the property that could be used with a separate entrance.
Does this work for you? If you’re over 35, we are guessing you are immediately dismissing this idea, and we don’t blame you. But if you have come here looking to jumpstart your savings or investing, and you’re young, why not? Chances are, you were used to living with a roommate or two for college. If you’re 25 or 26, why not keep a roommate for a few more years if he pays over 50% of your mortgage via rent?
If you have a home in a desirable location, chances are you also have a good-sized mortgage. Could using that in-law suite as airbnb give you a chance to tackle that mortgage or invest some more?
Example: Buy home with a $1500/month mortgage. Either it has an additional bedroom (with its dedicated bathroom) or maybe a fully completed basement. You could rent out that additional dwelling space for $750, let’s say, and let someone else make half your mortgage payment. Or maybe two bedrooms at $600 each (which would be a great deal for many single workers) to bring in $1200. This isn’t something you would want to do for decades, but how about a few years so we could save some emergency funds or pay down debt?

What are your thoughts?

Tags: housing hacking saving