What Kind Of Home Is Best For House Hacking?

I’ve mentioned several times before how house hacking was one of the best decisions I made. It allowed me to make money (and save money) while learning home improvement in the process. And while house hacking, by itself, has been a great experience – I believe the type of home I chose to house hack contributed a lot to my ability to enjoy the process. So, before we dive into the details of this post – let me answer the question:

The best kind of home for house hacking is a multifamily property (I personally house hacked a duplex).

Learn more about house hacking different homes in this post: What Does House Hacking Mean?

What makes a home the best for house hacking

The features that make a home ‘the best’ will depend on your personal preference and desires. And while I talk about a few home features and mistakes to avoid in my house hacking guide, in this section – I’m going to talk about a few different characteristics that most people will value and search for.

Privacy

Privacy is one of the most important aspects when house hacking. It’s not enjoyable and, for most people, it’s not sustainable to house hack a place with poor privacy. This is where house hacking multi-family property really shines. You’re able to live in your own unit while your tenants live separately from you.

That’s the obvious benefit but, if you’re looking to maximize rental income – you have the additional flexibility to rent out additional units like normal and also have the ability to house hack your unit in the same way you would if you owned a single-family property. You get to house hack in a house hack. Basically, house hack inception.

Reccomended Reading: My Experience On How To House Hacking A Duplex

Privacy features that make a home more enjoyable to house hack in

• Separate entrances
• Separate driveways
• Separate basements (if you have basements in your area)
• Masonry fire blocking or soundproofing between units to help reduce sound transmission between units

Manageability

No matter if you self-manage your property or hire a property manager, you want a property that’s as easy to manage as possible. The easier it is to manage, the quicker and less expensive repairs will be when they happen.

Most homes in America are not built with future manageability in mind. This leads to things like core systems being in areas that are hard (or impossible) to service. However, as someone planning to essentially purchase an investment property – you should prioritize homes that are easier to manage. And if you’re not finding many homes

Manageability features that make a home better for house hacking

• Main lines of plumbing easily accessible in an unfinished basement
• The HVAC system is located in an area with plenty of space around it for maintenance and replacement in the future
• A Ranch style home with no second floor makes roof repairs easier and cheaper. It also makes adding ductwork for bathroom and kitchen exhaust fans easier if your property doesn’t already have them.
• A small yard allows reduces your landscaping cost and allows you to focus your efforts on a small area – which should make the yard nicer than if you focused those same efforts on a big yard.
• Having brick or vinyl siding. Brick siding looks better and functions better than vinyl siding but both options are low/no maintenance.
• No trees near the home or above the underground sewer line

The Neighborhood

Anyone that’s ever researched real estate investing will tell you that location is key.

As far as house hacking is concerned, I’d recommend avoiding location extremes. What I mean by this is don’t purchase a property for house hacking in the best neighborhood or the worst neighborhoods. You want to look for a property that’s in a safe, but relatively average neighborhood. Average neighborhoods tend to give you the best opportunity to find good tenants without sacrificing the number of renters in an area.

Location features that make a home better for house hacking

• There are other rental properties in the area (I use Redfin for this)
• Near major freeways
• There’s grocery shopping nearby
• Lawns in the neighborhood look maintained

Profitability

You can’t call a home “the best for house hacking” unless it’s profitable.

However, measuring the profitability of a house hack is something that I believe a lot of people do wrong. They go straight to analyzing the entire property as if it’s just an investment property. I believe that’s the wrong way to approach it.

There are a few options available to owners when they’re done with house hacking and it’s possible that renting the entire property is not in the plans.

I would recommend you determine the profitability of your house hack based on your intended purpose of living at the property. If it makes/saves you more money than not doing it – it’s profitable.

Next, I would recommend you spend a day thinking about what you want to do after house hacking. Once you figure out what you’d like to do after house hacking, you can then analyze the profitability of the house hack for that specific goal. This should help you avoid dismissing properties that are fine for house hacking but aren’t great for other strategies.

Also, I know people who have house hacked for decades and continue to enjoy the benefits associated with it as I write this post. So, even though I typically assume you (the reader) are going to house hack and eventually rent the property out (like I did) – that doesn’t have to be the case.

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