House Hacking in Los Angeles – Is It Worth It?
You’ve heard the term “house hacking” but what does it really mean? House hacking is when you purchase a property with the intention of using it as your primary residence while also renting out a portion of the property to tenants. In Los Angeles, this typically means purchasing a duplex, triplex, or fourplex and living in one unit while renting out the others. The idea is that by doing this you can offset a portion of your mortgage payment with rental income. But is house hacking in Los Angeles really worth it? Let’s take a look.
The Pros of House Hacking in Los Angeles
There are definitely some benefits to house hacking in Los Angeles. First, there is the obvious benefit of offsetting your mortgage payment with rental income. If you can find a property that cash flows after all expenses are paid, then you can live for free! Additionally, if you live in one unit and rent out the other units, you may be able to get by with a lower mortgage payment than you would if you were buying a single-family home outright. And let’s not forget about the tax benefits – owning an income property means you can deduct mortgage interest and depreciation on your taxes.
Another big pro of house hacking is that it allows you to build equity quickly. By living in one unit and renting out the others, you are effectively saving money on rent while also building equity in the property. And if you ever decide to sell the property, you will most likely be able to sell it for more than what you paid for it since properties in Los Angeles tend to appreciate over time.
The Cons of House Hacking in Los Angeles
Of course, there are also some downsides to house hacking in Los Angeles that you should be aware of before making the jump into real estate investing. One of the biggest cons is that it can be difficult to find a property that actually cash flows after all expenses are paid. In order for house hacking to be worth it, you need to find a property where the rental income covers all expenses including mortgage payments, insurance, taxes, repairs/maintenance, etc. This can be difficult to do given how expensive properties are in Los Angeles.
Another downside to house hacking is that being a landlord comes with its own set of responsibilities and headaches. Even if you hire a professional management company to take care of day-to-day operations, there will still be times when you have to deal with unruly tenants or unexpected repairs. When things go wrong (and they will at some point), it will ultimately be up to you as the landlord to make things right again.
Overall:
So is house hacking worth it in Los Angeles? If done correctly, then yes – house hacking can be an excellent way to offset your living expenses while also building equity in a property. However, there are also some risks involved so make sure you do your due diligence before making any decisions!