Living costs have risen in North America, and many Canadians are finding it harder to get by. Lots of young people dream of breaking into the housing market but aren't so sure if homeownership is affordable anymore.

So, what can buyers do to ease their financial burdens after they become homeowners? There are multiple ways to make homeownership work, but I'd like to look at a very effective one today called house hacking.

One of the best things new homeowners can do to make life more affordable is called house hacking, which is a new term for a concept that's been around for a very long time.

So, what is the basic idea behind home hacking? To hack something is to alter or adapt it in some way so that it better meets your needs. In this case, you're altering how your home or property is used in order to meet your goals.

And if your goals are to make life more affordable and pay little to nothing out of your own pocket for your mortgage, while saving and investing your money, home hacking might just be for you.

So what is the home hacking strategy?

Well, there is real potential for ambitious home hackers to acquire multi-unit properties, like duplexes or triplexes, either by building, buying, or acquiring, and living in one of the units while renting out the others. That's the gist of it.

The people who use this method are able to get around paying for rent themselves, but they can also decide to make additional payments on the principal so their home is paid off faster, or save in a TFSA or RRSP or invest with a wealth management company.

How Can Home Hacking Help You Thrive?

Home hackers can use the money they save to improve the property with renovations and updates to attract top-tier renters, save extra cash, and use their equity to help refinance their property to purchase other income-producing assets.

House Hacking in Sarnia-Lambton

Many young people in big cities like Toronto or Vancouver would virtually never be able to afford a home because it's just too expensive these days for what little they'll make on their salaries every month. House hacking is really a technique meant for big-city dwellers where home costs are absolutely bananas.

But as we've pointed out before, Sarnia-Lambton still has the most affordable housing of all medium-sized cities in Ontario. But anyone following our market updates has seen that prices have risen. So, while house hacking may not be the most necessary in a more affordable area like Sarnia-Lambton, certain people could get a big boost from doing so.

Do I Need to Purchase a Multi-Family Property?

No, you don't even need a multi-family property. Some home hackers don't care to move, so instead, they finish their basements, adding a full bathroom, kitchenettes, and bedrooms. This is a great way to both add value to your home through improvements, and get your full mortgage payments, or at least a large portion of them, covered by renters. This could also be true for renting out rooms in your home, allowing your renters to share your space if that's something you could tolerate.

Secondary Suites

If you like the idea of house hacking, but don't want to give up any of your home's space, you could consider building an additional dwelling unit, or secondary suite. These are essentially detached granny suites that will usually be found in backyards. These will require adding electrical, plumbing, and heating because they are essentially just tiny homes. And they can be great for resale, as having a detached income-generating unit, or simply a guest suite can be really appreciated by buyers.

Tips for Aspiring Home Hackers

If your interest is piqued, then listen up. Let's do a scenario for someone who is on the younger side. So, you're young and employed and you would like to go the duplex or triplex route. Start saving every chance you get. Cut out stupid costs in your life and eat out less. If you're living at home with family, use this as an opportunity to save as much as you can for a down payment, and if the family is willing to help you out that's great.

Get pre-approved by a financial lender to see what your price range is. Contact a realtor and let them know your intention, then they'll send you all relevant duplexes or triplexes, or even homes that are laid out well for renting. See as many of these properties as you can, then make an offer on the right one for you.

Finding a property that requires little to no renovations will mean being able to find tenants quickly after you take possession. From here, you can find and screen tenants, or hire your realtor to fill the space with quality tenants for a reasonable fee.

So, that is how to hack your home. If you'd like to become a home hacker, but need a great property, give our team a call today at (226) 778-0747.