Lingo watch: “House hack”

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Forbes defined home hacking As “a strategy that involves renting out portions of your primary residence to generate income that is used to offset the cost of your mortgage and other expenses associated with owning a home.”

  • While this sometimes includes a single-family home, it is “usually done with smaller, multi-family properties such as duplexes, triplexes, or any property with divisible living spaces,” To good Housekeeping.
  • “That way owners can live in one unit while renting out other units to tenants.”
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why it matters: House hacking “represents the natural culmination of the way housing has been turned into an investment vehicle over the past 50 years,” According to the New York Times Article How jackfruit bidding wars cost people in hot markets like Austin.

background story: The term was coined in 2018 by a blogger named Brandon Turner, who described a poster: “An Introduction to House Hacking: Here’s How I Get Paid to Live for Free.”

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On the other end: There are a lot of potential pitfalls in renting out your living space to others. Risks include potential lawsuits, violation of tax laws, and termination with toxic tenants who won’t leave.

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