Your home is the place where you live, but it can be much more if you know how to use it properly. That is what house hacking proposes, a method widely used in the United States to earn extra money for your home or live for free, depending on how you set it up.
What is house hacking?
House hacking is a strategy for buying a house with a different approach. The term refers to hacking your house and the ultimate goal is to be able to buy your home more easily and without having to invest so much money.
The way to do it is simple: instead of seeing your home as the place where you live, you have to start seeing the home as an asset that can generate additional income.
This involves renting out a space in your home, for example, rooms that you do not use, or renting out the house for a certain period of the year, which is more common for a second home.
This extra income could help you pay your mortgage or other housing expenses.
Models for house hacking in Spain
House hacking is widespread in countries like the United States, where the housing stock includes different types of houses and is not so dominated by apartments. According to data from Funcas , 65% of Spanish residents live in apartments.
This fact makes the house hacking model in Spain more focused on certain types of agreements. These are the most common:
Renting individual rooms. This is the most suitable option for Spain. In a nutshell, it consists of buying a house with several rooms and renting out the ones you don't use. The least intrusive way to do this is with people you already know or who are looking for a house or with your current roommates.
Renting your apartment through Airbnb. As long as the laws in your community allow it, you can rent out your home when you are not using it, such as a beach house. You can also rent out your own apartment seasonally or host tourists.
Renting out a floor of your house. This is the most traditional model in the US, where many homes have several floors and a garage. It is like the room-by-room rental model, only you rent out an entire floor and even renovate the garage to make it habitable.
There are other variants of house hacking, such as dividing a large apartment into several apartments or renting out a plot of land in your home, if you live on a plot. As you can see, the leitmotiv for all of them is very similar to renting out part of the house to reduce the amount of money you pay on your mortgage.
Advantages of house hacking
The virtues of this model seem quite obvious and are:
Pay off your house early, if you choose to keep your payments and use the money generated by house hacking to pay off your mortgage early .
Buy a house with less effort or contributions on your part. You will have income that will make it easier to pay the installment.
Buying a home you wouldn't otherwise buy, such as a home with several bedrooms instead of one.
Generate additional income, which is ultimately what is achieved with this strategy.
Familiarize yourself with real estate investing, since to start you will have to do some calculations similar to those you would do when buying a house to rent, for example.
Is it possible to live for free with house hacking?
This question sums up the most extreme form of house hacking: living without paying for the house.
It is a possibility, but to achieve this you will have to balance your accounts. The objective is that with the income from the rent you can meet the payment of the mortgage plus the rest of the expenses of being a property owner. Namely: the IBI, community fees, home insurance and maintenance and repairs.
If you add up to 700 euros a month and you are renting out two rooms in the house, you will have to charge around 400 euros a month for them if you add the taxes you will have to pay on that income. As you can see, it's all a matter of adjusting expenses and income and seeing how far you can go.
