How to afford a house in Nashville: House Hacking Your Way to Home Ownership

‘Josh’, I was asked, ‘do you know of any apartments I could rent for $700.00 a month?’ 

The question is a fair question, from someone seeking the opportunity to find a suitable home for them and their beloved animal.  The question is not an impossible question to answer, because there are homes and apartments available for rent at that price and I am a real estate agent and should be able to locate those properties. 

The question led me to think through other possibilities.  Is there something else out there that might meet the needs of someone looking for a home and at the same time provide them more than just a roof over their head? 

That thought led me to the suggestion of ‘house hacking.’ 

What is house hacking, you might ask?  Who might benefit from house hacking and how might house hacking be the gateway for bigger and better opportunities?

House hacking is the simple process of renting out a section of your house, whether that be a single family home, a duplex, triplex, or quad-plex, while also residing in the home. For the right person, this strategy could be the perfect way to enter into home ownership and at the same time profit from your property. 

What’s even greater is that you can use some of the same loan packages that you would use for any single-family home. 

This simply means that possibly with only 3 - 5% down, you could for example buy a duplex, rent out one side and let that tenant pay most, if not all, of your mortgage.  You would be able to live almost freely and have someone else building equity for your home. 

Where I live, you can right now buy a duplex for $150,000 that is currently cash flowing $650.00 each side. 

Imagine you brought 5% down on a 30 year loan:

$150,000 x .05 = $7500

Annual taxes = $721 

Annual insurance estimate = $900 

Interest rate = 3% 

The payment for this property would be around $735 a month. 

So, can I help you find a place you and your dog could rent for $700.00 a month? Most likely, yes. But, I can also help you find a place that will put you on a journey to financial freedom. 

Do you want more information on house hacking? Check out this article from Bigger Pockets.  Give me a call if you would like to talk through what this strategy might look like for you.