As realtors, We’re often asked about new and innovative ways to invest in the real estate market. One approach that’s gained popularity in recent years is “house hacking.”
What is house hacking?
House hacking is a type of investment strategy that allows real estate investors to maximize the potential of their investment by leveraging rental income to cover the costs of their mortgage, taxes, and other expenses associated with owning a property. Essentially, house hacking involves purchasing a property with multiple units (such as a duplex, triplex, or quadplex) and living in one of the units while renting out the other units to tenants. The rental income generated from the other units can then be used to offset the owner’s living expenses.
Benefits of House Hacking
One of the most significant benefits of house hacking is the potential for generating additional supplemental income. By renting out the other units, you can earn rental income that can help offset your mortgage payments, property taxes, and other expenses. This can be particularly helpful for first-time homebuyers who are looking to get into the real estate market but may not have a lot of disposable income to spare.
Lower Monthly Expenses
Another advantage of house hacking is that it can help lower your monthly expenses. By living in one unit and renting out the others, you can reduce your housing costs significantly. Additionally, if you choose to purchase a multi-unit property with a lower mortgage payment than you would typically qualify for, you can use the rental income to pay down the mortgage faster or invest in other properties.
Build Equity
Owning a property can be a smart way to build equity over time through investing. With house hacking, you have the potential to build equity more quickly by using rental income to pay down your mortgage faster. Additionally, when or if you choose to sell the property down the road, you have the opportunity to benefit from any appreciation in the property’s value since the time you originally purchased it.
Tax Benefits
Finally, house hacking can offer several potential tax benefits. For example, you can deduct your mortgage interest, property taxes, insurance premiums, and other expenses associated with owning and operating the property. Additionally, you may be able to claim depreciation on the portion of the property that you rent out, further reducing your taxable income. However, we are not professionals on tax advice and suggest you speak with a tax expert before house hacking or purchasing an investment property.
House hacking is an excellent strategy for real estate investors looking for crafty ways to generate additional income, lower their monthly expenses, build equity, and enjoy potential tax benefits. If you’re interested in exploring this investment strategy further, it’s essential to work with a knowledgeable real estate professional who can help you find the right property and navigate the complex legal and financial aspects of real estate investing. Good thing you’re already in the right place to find one of said realtors.
Newest MLS listings in Quinte and PEC
Browse the most recent MLS houses for sale in the Quinte area and Prince Edward County. Search real estate listings to find exactly what you’re looking for and narrow results. Ready to book a showing? Fill out the form on the listing page or email hello@quinteliving.com.
3118 County Road 10 Road
Prince Edward County, Ontario
Century 21 Leading Edge Realty Inc.
19 Ambrosia Terrace
Quinte West, Ontario
1973 County 30 Road
Brighton, Ontario
41 Cortland Way
Brighton, Ontario
2992 County Road 10
Prince Edward County, Ontario
1 Reynolds Place
Prince Edward County, Ontario
895 English Settlement Road
Quinte West, Ontario
42a Hill Street
Prince Edward County, Ontario
20 Stinson Avenue
Belleville, Ontario
Century 21 Heritage Group Ltd.
113 South Trent Street
Quinte West, Ontario
201 - 36 Hollow Lane
Prince Edward County, Ontario
23 Schmidt Way
Quinte West, Ontario
8 Catherine Street
Prince Edward County, Ontario
29 Schmidt Way
Quinte West, Ontario
27 Schmidt Way
Quinte West, Ontario
11858 Loyalist Parkway
Prince Edward County, Ontario
25 Picton Main Street
Prince Edward County, Ontario
220 Easterbrook Road S
Prince Edward County, Ontario
9 East Mary Street
Prince Edward County, Ontario
201 - 344 Front Street
Belleville, Ontario
30 Pine Ridge Drive
Prince Edward County, Ontario