Real Estate: Quick Beginner Tips

by Debbie Taylor 01/21/2020

Photo by Free-Photos via Pixabay

For some, house hacking is the key to getting started in real estate; for others, it's just a smart way to build cash flow into an otherwise uncooperative rental market. Wondering how to get your foot in the door? Here's what you need to know. 

What is House Hacking? 

The term "house hacking" was coined by Bigger Pockets, but in general, the practice has been going on for as long as people have been owning and renting properties. House hacking refers to renting out a part of your primary residence. Generally, that means owning a duplex, triplex, or quadruplex, living in one unit, and renting out the rest. For some, it means renting out one or more rooms of a single-family residence. In an ideal scenario, house hackers can essentially live for free--allowing the rental income from the space they rent out to pay for the mortgage and maintenance of the entire property. 

Why is House Hacking a Smart First Investment? 

As with any investment, the viability of house hacking depends on the market in your area. But for many who want to get into real estate investing but haven't yet taken the plunge, it's a smart step. 

  • Owner-occupants enjoy the best financing terms. When you plan to use the property as your principal residence, you'll get lower down payments (as low as 0-5%, in the case of VA and FHA loans) and lower interest rates. 
  • House hacking serves as training for managing more tenants. Because you'll be living in close proximity to your tenants, it will be easier to keep an eye on your property and address repairs and other issues as they arise. It's a great way to earn a few notches in your landlord belt before purchasing more rental properties in the future. 
  • When you decide to move out, you can rent out the final unit (or the primary house) and enjoy the full benefits of positive cash flow thanks to your low-interest-rate home. 

An Accessible Way to Start Small 

Step one: talk to a lender. If you can get pre-approved for a single family residence, you can get pre-approved for a duplex (or larger).

Already own a home? Consider renting out an extra bedroom, or finishing the basement to rent out as an ADU. And even if you don't net massive positive cash flow at first, you'll massively offset your own cost of living, while gaining valuable experience as an investor and property manager. 

About the Author
Author

Debbie Taylor

Debbie Taylor has over 25 years of experience and knowledge in the Denver Real Estate market. First as an investor and for the past 18 years as a REALTOR.

Debbie Taylor specializes in Central Denver homes and has over 20 years of experience in Central Denver and surrounding areas. I am an area expert for Denver Cherry Creek, Hilltop, Washington Park, Denver Country Club, Alamo Placita, Crestmoor, Montclair, Park Hill, Congress Park, Mayfair, Mayfair Park,Lowry, Stapleton, Park Hill and Cheesman Park. I can provide you with all of the information you will need to know about buying or selling a home in Colorado. It is vital that you put your trust in someone who knows the market and has the personal resources, network, and accountability in the community to get you the best deal possible.

Because the real estate industry is becoming more complicated and advanced everyday, you simply have to have a professional in your corner that understands the industry and is positioned to stay ahead of the game.

I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using the most aggressive advertising and marketing techniques available to attract potential buyers. I wants you to enjoy the process of selling your home. My goal is to get as many qualified buyers as possible into your home until it is sold.

Call Me today if you would like to begin the process of finding a home or selling your current one. I look forward to negotiating on your behalf. When you employ Debbie to handle your real estate interests, you have employed a valuable, detail-oriented REALTOR who holds your best interests at hand.

I have a firm knowledge of what makes a successful home investment. Feel free to contact them if you would like an evaluation of your home and its value or if you have any other questions about the real estate market here in Colorado. I have a full relocation package available upon request just give me a call on 303-589-6692 or send me an e-mail at [email protected]

Debbie Taylor, CRS, Broker/CO-Owner RE/MAX of Cherry Creek