When you think of passive income, do you think of rental properties? Do you think of the headaches that come along with that? Managing the property, dealing with tenants, repairing leaks/issues.
What if you could avoid all of that with one simple passive investment strategy?
I’m talking about house hacking!
House hacking is simply renting out rooms in a place you live/own that you are not using. They pay to live there, you collect the money, and it goes towards your mortgage/rent and the excess goes straight into your pocket.
There are three common ways to house hack:
1. Roommates
Help a friend or family member out and let them rent a room from you. However, you should still make things official with a lease. This would be considered a long-term renter.
2. Out of town employees in your city
These are short-term renters who are in town for usually between 1-6 months. They are traveling nurses, out of town construction workers, students, etc.They aren’t in town long enough to sign a lease at an apartment, but they also don’t want to have to pay for a hotel every night.
Treat them well, and they will send their friends/co-workers to you when they leave. Referrals are a beautiful thing for this strategy.
Call local hospitals to try and find contacts to traveling nurses and medical students.When you see a new development going up in your town, look for a sign that says who the development company is. Call them to find out who they are hiring to come in and help from out of town.
3. AirBnB/VRBO
My personal favorite! And depending on the demand in your city, it can definitely be the most lucrative. These are considered hotel-accommodation leases. Usually these people aren’t staying much longer than a week.
You set your price! Conservatively, if you can get $50 per night for each room, and you book 15 nights per month, that’s $750 per room you rent! These are arbitrary numbers. Do your research in your city to see what others are charging.
Research other listings in your area to make yours competitive. Are the other listings getting booked out more than 15 nights per month? Are other listings getting good reviews? Do your research to see how you can stand out in your market!
Airbnb and VRBO are very similar sites. You can’t go wrong with either one. However, more people seem to search AirBnB before VRBO, so you may want to get started on AirBnB first.
House hacking is your key to cash flow and paying down your mortgage faster!
If you have more questions, comment below or e-mail: kyle@fearlessflipping.com
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