Home is where the heart is, and there’s money in it too


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Flash info: buying a house is expensive.

In Portland, in particular, owning a home is getting more and more expensive. It doesn’t have to be a complete financial drain, however. In fact, it is possible to buy a house and make money.

Welcome to the art of home hacking – the practice of buying a multi-unit property or single-family home with an ADU and living in a unit while renting out other parts of the property to help offset your mortgage and other costs.

This is something Sophia Rosenberg knows well, and not just because she sells houses for a living. A real estate agent with PDX Inspired, Rosenberg has direct experience of successful home hacking: in 2016, she bought a centennial four-seater in North Portland who was the best

its budget. She converted the property’s ADU – a former music studio – into an AirBNB that ended up bringing in $ 30,000 a year, allowing her to cover the mortgage and, in 2020, buy her home. current at Concordia.

“I see real estate as a ladder that people can use to gain financial freedom,” says Rosenberg. “With home hacking in particular, it allows people to do it a bit faster. “

And according to Rosenberg, Portland is a great place for it, thanks to the demand for short-term rentals, the influx of young transplant families from out-of-state, and the concentration of hotels outside of the most affluent neighborhoods. most sought after in town. (Since 1992, there have only been 4 years that house prices in Portland have fallen, and that was during the nationwide recession.)

It’s a simple concept, of course. But doing things well is knowing what you are doing, and also knowing the pitfalls to avoid. So we asked Rosenberg for five tips for venturing into the world of home hacking.

Tip 1: Do your homework, literally.

Before assuming that you can hack a home in order to comfortably cover part or all of a mortgage, market research is crucial. Look at long term rental prices for comparable homes in your area. If you’re considering short-term rentals, check local Airbnb listings for daily rates and typical occupancy length. Also, try talking to people doing similar home hacking activities to get as much anecdotal information as possible.

Tip 2: Know the law and know it will change.

It is important to fully understand the short term rental laws in the area you wish to purchase. Rules differ by city and county, and often change frequently to accommodate long-term housing crises. (Find Portland here: https://www.portland.gov/bds/astr-permits/you-apply.) Make sure that when you buy a property with the intention of hacking a house, you have a plan B to generate income. Also be sure to check the zoning laws if you plan to build a new structure.

Tip 3: Follow the money.

Take a holistic view of your finances: what are fixed expenses, operating expenses, your net income, and a budget for repairs. Looking at these things holistically can help to make

a good investment decision. (You’ll want to make sure you have money set aside for any necessary repairs or upgrades, including furniture, kitchenware, and linens.) From there, find the financing that’s right for your business. situation. Some lenders are familiar with investment property and the concept of home hacking, while others are more traditional. Work with a lender who understands your goals and the intended uses of the property to find a loan that matches your plan. Local lenders are often preferable to national chains and brands because they are more readily available and want to make sure they understand the buyer’s goals.

Tip 4: Gather your team.

Hire a financial and tax advisor to determine the best way to set up your investments. Depending on your overall financial situation, you may want to start a company in order to save taxes and protect yourself from personal liability. Make sure your home insurance provider also understands the intended use of your property so that you have proper coverage and find an agent with experience in investment property and / or home hacking. They will be able to truly guide and recommend properties that can be great sources of income. Then prepare a support team: cleaners, painters, contractors, plumbers, electricians, etc. Your real estate agent should also be a great source for this.

Tip 5: Provide an experience for your guests.

Make sure your ad is designed with beautiful furnishings and equipment and professionally photographed. Your real estate agent can help you make these connections.

“My past professional experience was in interior design, styling photoshoots and marketing-branding of new hotels, so I’m really able to tell a story through photos and marketing to earn them the better price for the job they did, before potential buyers even walk into the house, ”says Rosenberg. “I never think of design, both for buyers and sellers. “

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