HOUSE HACKING: Strategies & All You Need

house hacking strategy in California, books and calcultor.

Staunch business experts have implemented a strategy that enables them to live affordably while saving, actively investing, and milking the real estate industry.  The emergence of this strategy was brought about by the frightening rise in the prices of rent and housing. This strategy is known as “house-hacking,” and it involves buying a house for yourself, and renting out the rooms you are not occupying. This guide explains house hacking strategies in California, using books and a calculator.

Over the decades, house-hacking has been a proven method of helping young adults acquire properties and also live comfortably at little or no cost. Whether you need ways to provide passive income streams and fund a flexible retirement; house-hacking promises extra income and a taste of the landlord’s style.

What is House-Hacking?

In simple terms, house-hacking is living in a property and renting out another part of it to cover expenses. It also means finding ways to generate income from your home.

Originally, it involved buying a multifamily property where you rented out the spare bedroom so that tenants would pay the owner’s mortgage.

The main goal is to use the rental expenses associated with owning the property, which means you get to live there for free while you build equity in your investment. House-hacking emanated from areas where the cost of housing became expensive. As a result, it became expensive for homeowners to own a home close to work or in an area of their choice and pay monthly taxes.

Savvy entrepreneurs have always been certain that buying a multifamily property is an effortless method of becoming accustomed to property management and landlording, with all the housing expenses paid by the tenant.  Nevertheless, it is highly underrated by people.

House-Hacking Strategy

For a successful house hack, make sure to find a property with as much space as possible to generate a high income. Suitable properties are usually multi-family properties, extra bedrooms in a single-family house, and extra spaces that serve as bedrooms or livable spaces.

It is important to take note of the following when analyzing a property, either a single-family home or a small multi-family property, as a potential house hacking opportunity.

Let’s take a look at common house-hacking strategies used by people to get rental income.

#1. Become a Building Manager

One method of reducing rental costs and saving more is by becoming a building manager. That is, showing vacant apartments, collecting rent, handling maintenance calls, and contacting contractors when the need arises. Owners of apartments often offer free rent in exchange for these management services.

For small apartments, a discount on rent is available, while in large apartments, free rent is offered. Although, additional management fees may apply. Payment for property management services, like every other service in life, is completely negotiable and depends on the agreement reached with the property owner.

#2. Buy multi-Family Properties

Buying a duplex or small multifamily home, moving into one unit, and leasing out the others can be a good way to generate income to cover the mortgage expense. Be sure to look out for properties with enough space to increase revenue.

The type of neighborhood the property is situated in influences the type of tenants the home attracts and, of course, the rent they can afford to pay. Property taxes also vary from place to place; hence the need to be on the lookout for a good site.

The number of rental home listings and vacancies in the area indicates the level of demand for rental property. This is important because high vacancy rates may lead to lower rents and, as such, poorer investment returns.

#3. Rent out Space to House Mates

Another easy way to hack a house is to rent out spaces to housemates or share a home with a housemate. Not only does this provide you with a monthly rent payment, which may exceed your monthly mortgage cost, but you also get to split other maintenance costs.

Renting out your home while you still live in it costs you privacy and personal space. But looking on the bright side, it reduces the financial costs and expenses spent on the maintenance of the property. Besides, the house may be arranged in a way that the privacy of both occupants is not affected.

As the owner of the property, you have the upper hand in terms of enforcing household rules. It is paramount that you carefully screen anyone you’re thinking of renting from, ting especially if you’ll be sharing spaces and responsibilities around the house.

#4. Do a Live-in Flip

If you like working around the house, hacking through a live-in flip could be a great option. You buy a habitable home that needs renovations, make them while you live there, and then sell the property for a profit.

For instance, if you buy a house for $300,000, spend $50,000 renovating it and sell it for $450,000, you’ll walk away with a huge profit even after paying the real estate agents and other closing costs. You don’t have to do all the work yourself. If you so wish, you don’t get to lift a finger because you can always hire a contractor to do the whole thing. All you have to do is to be prepared to live with the dust, noise, and dirt from the construction in your home, which won’t take forever.

#5. Houses Near Public Transportation

When looking for a property to hack, keep in mind that the number of bedrooms is significant. But it is not the only factor you will have to consider. It is of zero use if no one has an interest in getting the rental space. Homes in desirable areas of town and close enough to public transportation, health facilities, academic facilities, and shopping malls.

Acquiring a property in an area nobody wants to live in will pose plenty of problems when finding tenants to help you house hack. As such, houses in the best part of town will suit you best.



#1. Cash Flow

This is one of the main benefits of house hacking rental properties. The extra income is gathered each month after all the expenses have been paid. The extra cash can be used to pay off a mortgage debt or reinvest in other properties.

#2. Financing

Mortgage for a multi-unit building is also obtained through house hacking.

#3. Landlording

 Many first-time homebuyers and real estate investors get valuable landlording experience through house hacking. This includes advertising vacancies, tenant screening, tenant management, dealing and negotiating with contractors, and bookkeeping, which are all learned at a rather low level of risk.

#4. A starting point for new Real Estate Investors

As a real estate investor living on your property, you get to enjoy all the benefits of owner occupancy. House hacking is a great real estate investing strategy and a good step to starting as a real estate investor if you’re willing to take action immediately.


#1. You have to be a landlord

There’s not much of a choice. With or without roommates, or tenants, you have to act as a landlord. Aside from that, you’d also need to be a legal landlord, which involves reading up on local laws to avoid defaulting on the lease agreement.

#2. Living near your tenants

Most landlords do not live in the same rental property as their tenants. This creates some distance between them and their tenants. But when house hacking occurs, your tenants are simply a wall away. This may bring about issues with lack of privacy or not feeling ‘at home’.

#3. Giving up a part of your home

Most of the time, you have to lose a part of your home, either the basement or an extra room, which makes those areas rented out inaccessible to you.

House-Hacking Books

Now you will learn exactly how to master the act of house-hacking, used by savvy investors for decades. House hacking can save a whole lot of money and extra expenses, build equity yearly, and even provide financial strength to retire early when fully understood.

House hacking isn’t a hard nut to crack. Many successful real estate investors learn from an expert who has ‘hacked’ his way towards financial freedom. Craig Curelop, an adept house hacker, explained extensively in his book, ‘The House Hacking Strategy’, all the information needed to make your next house hack a huge success.  

Inside, you will learn:

  • Meaning of house hacking and why it is one of the most reliable methods of building wealth.
  • The connection between house hacking, wealth building, and early retirement.
  • The different kinds of house hacking strategies.
  • How to get started with house hacking-even with low income or savings.
  • How to find the ideal house-hack property
  • Stories from real estate investors on their house hacking triumphs.

House-Hacking Calculator

Irrespective of where you are in your house hacking journey, you will need a unique calculator to ensure your financials are correct for future growth. The goal of the house hack is to cover all your expenses, if possible, which is very rare to pull off but can be possible.

This is a process you don’t have to do all by yourself. Your mortgage broker can easily help out. But if you’re reading this article, it means you love doing things yourself.

So, here’s a simple step-by-step procedure to calculate a mortgage payment without any form of assistance.

  • Estimate the purchase price of the property.
  • Estimate the down payment.
  • Subtract the down payment from your purchase price to get your loan.
  • Go to ‘online mortgage calculator’.
  • Enter the principal, interest rate, and the number of payments.
  • Leave payment amount and balloon payment blank and leave payments per year at 12.
  • Click calculate.

The mortgage calculator tells you the monthly payment amount.

House-Hacking In California

It is no longer news that buying a house is expensive. Home buyers have deployed a new strategy to own a home without breaking the bank.

Over the past decade, Californians have built insufficient homes to keep up with the rapid population growth. As a result, legislators addressed the problem by reducing barriers and making the approval process for constructing accessory dwelling units (ADUs) in single-family or multi-family residential zones a lot easier. These ADU laws helped a lot of first-time homeowners make extra income with rental properties.

The COVID-19 recession sent many people looking for more pocket-friendly housing and extra streams of income. The ADUs were a big solution to both needs.

For further clarity, an ADU is an accessory dwelling unit with complete independent living facilities for one or more people.

It could be detached. That is, a dwelling unit detached from the primary structure or attached to it. That is, a dwelling unit attached to the primary structure.

Converted space An ADU is a space on the lot of the primary residence that is converted into an independent living unit.

Some guidelines to which Californians should adhere

  • Only one ADU is allowed per single-family home.
  • A utility fee is charged in proportion to the ADU’s size. The fee is reduced if the ADU is constructed in the main house.
  • A converted space ADU constructed within a half-mile radius of a transit stop or car-share will not require additional parking space.
  • Cities will not require a 10-foot ADU passageway.
  • Standing garage conversions no longer need setbacks, but, ADUs built above the garage will require a rear five-foot setback.
  • The ADU floor cap space for detached units is 1,200 sq. ft, and for attached units, it is the lesser of 1,200 sq. ft or 50% of the house size.

Like in every passed law, there are always regional exceptions. So, it is important to look up your local zoning rules to see if you qualify.

Final Word

Many people don’t ever question expenses like housing, food, and clothing as they see them as basic necessities everyone has to contend with. But not everyone does. There’s a creative way to cut costs and save a whole lot without compromising on the standard.

So, if you’re looking for a way to maximize your rental income and milk into the real estate industry, then house hacking is the best way. You have plenty of options. Your mission is to find the one that works best for you.

I hope this guide has been insightful. I have given you over 2000 words of advice about house hacking. Now the ball is in your court!


What does it mean to hack your house?

House hacking is another way you can earn extra cash from your home.

How long do you have to live in a house hack?

House hacking is an excellent way to cut your living expenses, but it will require some commitment. You must live in the property for at least one year if you buy as an owner-occupant. If you purchase a multifamily home, you must live in one of the units for at least one year.

What should I look for in a house hack?

A mortgage with fixed interest rates and a modest down payment.
A low-cost or below-market-value investment property.
A sufficient rental revenue to pay housing bills.

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