Househacking in Austin
We love Househacking!
At The Moorhead Team many of us started by making a househack our first home.
For those not familiar with the term househacking is buying a property and renting out all of the extra space that you aren't using. This could be a multi unit property where you live in one unit and rent the others or a single unit property where you live in one room and rent out the others. You can also combine these strategies and buy a multi unit, rent out the other units and then rent out your extra rooms in your unit to friends. Another popular way to househack is to buy a single family property with an Accessory Dwelling Unit and rent out the ADU on Airbnb. This can be a great way to do a luxury househack and buy a great house in a nice area, but subsidize living there through the ADU income.
There really is no wrong way to househack and all you have to do is utilize your primary residence to make income which will offset mortgage expenses and lots of times allow you to live completely for free.
Think of it as a comfortability scale where the more uncomfortable you're willing to get, the more money you'll make. Many of our clients not only live for free, but they get paid to live in their own homes. Others live in amazing homes in amazing areas and only pay a small amount to live there.
There are a few major benefits to househacking:
- Saving on housing expense. This is the biggest one in our opinion. Every dollar you save is worth more than $1 since it's after tax money. Essentially every dollar saved is worth at least $1.30 in Texas.
- You get to convert the property to a rental property when you leave it. If you desire and you've set out to make this a rental property later it can be a pure rental property after living in it a year.
- You get the normal benefits of owning a property which are loan paydown, appreciation and tax benefits including mortgage interest deduction while you live there and adding on depreciation after you move out.
Home ownership has essentially created the middle class. When you throw a few househacks in there it's impossible to not turn out a millionaire over a period of 30 years, at the very least! We've had people on our podcast, Austin Real Estate Investing, who have become deca-millionaires off of househacking.