Realtors Brad Moore and Alison Maguire of Keller Williams Real Estate’s Moore Maguire Group take a look at the borough’s booming market.
House hacking is a real estate investment strategy that involves living in part of either a multi-unit or residential property and renting out part of it to cover the mortgage payment. It’s a popular trend every-where, and particularly in West Chester, where we see a high demand for rental properties.However, house hacking doesn’t just apply to multi-unit properties.
Let’s say you buy a four bedroom home in West Chester, and you rent out two or even three of those bed-rooms. This can likely cover the bulk of your monthly mortgage payment, if not all of it, and it may even make you money. This is an excellent way to make owning a home more affordable, as well as paying down your investment. Sometimes buyers will come to us having already decided that this is the route they’re going to take to home ownership. But in other cases, house hacking is often a solution we might suggest to people who come to us looking for a rental.
It’s an excellent creative option that may not have occurred to them, particularly people who didn’t think they could afford to buy.It’s a way of bridging the gap, so to speak, between what people think they can do and what they actually want to do.One thing buyers who are considering house hacking should keep in mind is that if they were to purchase in a condo minimum or homeowners association setting, there may be restrictions in the bylaws of that community which would limit rental opportunity.
West Chester’s student housing zoning code restrictions must also be taken into consideration — if the property isn’t currently a student rental, you’ll be unable to turn it into one. So, while a large percentage of renters might be students, they might not be your market. House hacking is also applicable in terms of renting out a room or portion of your home in the short term: think Airbnb.
As we touched on briefly last month, that route has its own considerations, like frequent turnover, cleaning and more regular administrative work. But given the high return on Airbnb, this can be an even more lucrative scenario than a long-term roommate rental situation. That said, there are borough codes that any rental property must abide by, and these involve an inspection, mostly for safety issues, that cover things like smoke detectors, railings and the like.
A rental license is inexpensive, and it must be acquired by any property owner who wishes to rent out space in any capacity. We like to offer clients creative solutions to help them achieve the home ownership dreams, and house hacking can be an excellent way to help pay for your investment while living in it. And as an alternative to renting, you could instead have the pride of home ownership, the building of equity, depreciation and tax write-off benefits, and the opportunity to live in a great place for a great price!