Primary home vs investment real estate

When I’ve posted about all the expenses related to owning your primary home in the past, I get a lot of comments like “but what if you buy it as an investment?!” or “but what about house hacking?!”. And that’s a good point. As far as investment returns go, owning your primary home is day and night from investment real estate. Owning your home doesn’t provide income. Investment real estate does. That’s a big difference. (For the record, my ever-present disclaimer: I’m not against owning your own home. I am FOR understanding the true costs of homeownership and not buying way more house than you were renting under the theory “it’s an investment”)‎

House hacking is kind of the hybrid. You live there, but also generate income from it. Some examples of house hacking are when you buy a primary home and:‎

• Rent out rooms to roommates‎
• Buy a duplex or triplex and rent the other units‎
• Add an additional dwelling unit and rent it out (e.g. remodeled garage or addition)‎
• Airbnb your home for events, high season, etc.‎
• Live in a tiny home or trailer and rent out the main home‎
• Flip where you live (spend a few months remodeling as you live there, sell and repeat)‎

Obviously, most of these scenarios aren’t as ideal as having your own single family home with no other renters. But if you want to be ambitious and mitigate the cost of your single family home it represents a great way to build equity in your home while simultaneously using it as an asset to reduce costs or in some cases even be cash flow positive!‎

As always, reminding you to stay healthy by following the two PFC rules: 1.) Stay at home and 2.) Wash your hands early and often.‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎
– Jeremy‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎‎
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