Why You Should Know About House Hacking

I moved to Chicago fresh out of college and lived along a gorgeous tree-lined street in Andersonville. It felt like living in the B roll of a documentary about Chicago real estate: two and three flat greystones and brick buildings standing shoulder to shoulder. I loved my beautiful neighborhood, but never gave a second thought to who owned these places or even where my rent check went every month.

Now I know that I was helping someone else build wealth each month that I paid my rent, and I work with clients who live in one of the units in their building and rent out the rest, helping to subsidize or entirely pay their mortgage each month. This is house hacking: owner occupying a building and acting as landlord to the units you rent out. Buyers who choose this path do so because it is the fastest way to build equity for themselves.

House hacking is becoming trendy amongst a subset of buyers, those who understand that real estate investing can provide a path to financial stability. But don’t be fooled, landlords occupying their property is a tried and tested investment strategy. This lowers or eliminates monthly mortgage payments from your budget because tenants’ rent payments subsidize those bills. This means that house hackers are often able to qualify for a bigger loan than they would on a condo or single family home, which many buyers do not realize when they first start considering their options in real estate.

These are great reasons to make your first investment a house hack, but becoming a landlord isn’t for every buyer. The Sarita Sells team works to make sure that our buyers have a good understanding of all of their options before they start a property search. Building equity happens whether a client purchases a multi-unit, condo or single family home, and we work to make sure each client is able to pursue their financial goals in the way that best serves their purposes.