Have you heard the term “house hacking” recently? Simply put, house hacking is a real estate investment strategy where you live in part of your property and rent out the rest to help with expenses. The truth is that our grandparents were house hacking long before it trended on Tik Tok, because it works.

Many homes built after the Second World War had a full basement with a second kitchen, bedroom, and bath. The assumption was that family members would live in the basement and save money until they could afford to move out. They contributed to the household while they lived in it and saved on expenses until they could cover the twenty percent down payment required at that time.

This strategy allowed for generational wealth to grow. Returning GIs bought homes with the help of the GI Bill passed in 1944 and their children became homeowners at an exponential rate in the sixties and seventies. Family also had a place to retreat to if hard times cost them what they had earned. Their homes were their security.

“House hacking” didn’t end there. The children of their children (Gen X) were encouraged to buy multi-family properties and live in one unit while renting another. Seminars on this tactic were incredibly popular in the 80s and 90s.

And then following the housing crash in 2008, young Millennials bought homes with their friends, turning single family homes into communal houses.

Baby Boomers—those born in the twenty years following the war—currently own 42% of all single family homes in the nation and roughly 18% also own multiple investment properties. This is noteworthy because prior to the war, only about 44% of Americans owned their home. Today, that number is closer to 66%. Government programs and the economic boom of the mid-twentieth century certainly played a large part in that, but millions still would not have been able to afford a home on their own without these tactics.

House hacking is just a modern term for the old-fashioned principal of community. Individually, saving tens of thousands to cover the down payment on a home and then paying an average of $2,200 a month to keep it is out of reach for most. By inviting renters, boarders, or family members to share the load, millions more can find their way into homeownership and the security it provides.

Did you know there are home loan programs that allow for boarder or rental income to qualify? Home Ready is one such program. If you would like to learn more, call us at 503-588-0211, option 4 or schedule a call here.

Written by: Elena Christian

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