DIARY ENTRY #19
House Hack Diaries
Just discovered house hacking?
As the locals say, Boston is “wicked expensive.” House hacking is the loophole that makes buying in Boston and the surrounding areas make more financial sense.
The concept is simple: turn your primary residence into an asset rather than a liability. House hacking isn’t just one thing, it can be done in a variety of ways depending on your personal preferences…but you probably already knew that or you wouldn’t be reading this!
If you’re buying your first house, or it’s been a while, the process can feel overwhelming. Before you start making offers do this.
1. Get your financial ducks in a row
So before you even start scrolling Zillow listings or daydreaming about your first house hack, you need to get your financial ducks in a row. That means having a strong financial foundation in place as you plan for your house hack. Start by looking at a few key areas:
Down payment and emergency savings: You can get started with as little as 3% of the purchase price on certain loan programs, but it’s smart to have at least six months of expenses saved. This gives you a buffer for unexpected repairs or gaps between tenants.
Debt-to-income ratio: Lenders want to see that your income can comfortably cover your mortgage and other obligations. Use online calculators to figure out your ratio and identify any areas to improve before applying for a loan.
Credit score: Your credit affects what loans you qualify for, your interest rate, and even how much flexibility you’ll have with lenders. Paying down high balances and avoiding new debt can make a noticeable difference.
Getting clear on these numbers now will help you move confidently when the right property comes along.
2. Match your house hacking strategy with your comfort level
Before you start looking at properties, figure out what version of house hacking actually fits your situation:
Rent by the room: Buy a single-family home, condo,or multi-family (2,3, or 4 unit) and live in one bedroom while renting out the others. Great for maximizing profits. Not-so fun for those who enjoy privacy.
Traditional house hack: Buy a small multi-family, live in one unit, and rent out the others. You get more privacy while still using rental income to offset your mortgage.
Short-term rental: Use Airbnb or another short-term rental platform to rent out part of your house. This could be an in-law apartment, ADU, basement unit, or other private space, depending on the property and local rules.
Live-in flip: Buy a property that needs work, live there while you renovate it, and eventually sell. No roommates required, but you’re trading tenants for construction and renovation.
Live-in BRRRR: Combine a traditional house hack with a renovation. Buy a property that needs work, live in it, improve it, rent out part of it, and eventually refinance based on the increased value.
Knowing what works best before getting started will allow you to identify areas and properties down the line that make sense for what you’re trying to accomplish.
3. Create a set of criteria for your location preferences
The best way to pinpoint your ideal neighborhood in Boston…or really anywhere is to work backwards. Ask yourself “what are my must-haves?”
Since you’ll be living in the property, it’s important that you want to actually live in the area. Not only will this help you enjoy your time in the neighborhood, it will also help you attract tenants like you–the best kind of tenants. Think about it, people with similar preferences will be attracted to the same things that drew you there in the first place.
Here are some of the most important criteria for selecting a neighborhood or town:
Property type: Multi-families, condos, and single-families aren’t distributed evenly across Massachusetts and certainly not across Boston either. Some towns are loaded with two-families. Others are mostly single-family homes. Your strategy may narrow the map for you.
Commute: Access to the T, commuter rail, highways, and major roads matters. Even if you work from home, your future tenants or buyers if you go to sell might not.
Amenities: Restaurants, coffee shops, parks, gyms, grocery stores, beaches. What do you actually want nearby?
Price: - Your money might go a lot further by changing neighborhoods or moving a town or two over. On the flip side, more expensive areas may support higher rents. What matters is that the numbers work for your strategy and the monthly payment fits your finances.
Rental demand: Check what similar units rent for and how quickly they move. Zillow, Redfin, and a good local agent can tell you a lot.
Working backward from your list of priorities will help you narrow down a shortlist of neighborhoods to explore. Once you have that list, it’s time to see them for yourself.
4. Connect with a real estate agent who understands house hacking
Not all agents think like investors.
You want someone who can look at a property and see more than a nice kitchen and curb appeal. They should be thinking about rent, layout, upside, tenant demand, and how the deal fits your strategy.A few things I’d look for:
They’ve house hacked themselves: Firsthand experience matters. They’ve dealt with tenants, financing, renovations, and the weird realities of living in your investment.
They know your market: Boston and the surrounding towns can change block by block. You want someone who understands pricing, rents, demand, and which areas fit your strategy.
They have the right network: A good agent should be able to connect you with lenders, attorneys, inspectors, and contractors who also understand what you’re trying to do.
Interview a few agents. Ask about their experience with investors and house hackers. Once you find the right fit, have them build an MLS search around your strategy. A good agent shouldn’t just help you find a house. They should help you spot the opportunity!
5. Get pre-approved
A pre-approval is when a lender reviews your income, credit, and debt to determine how much they’re willing to lend based on your debt-to-income ratio, credit score, and overall financial profile. Getting pre-approved helps you lock in a realistic budget, understand your loan options, and see what you can truly afford before you start shopping for properties.
Word of advice: you need a lender who’s creative, understands the strategy, and knows how to count potential rental income from other units or rooms to boost your buying power. The good news is that your agent can connect you with lenders who work with house hackers all the time and can help structure your financing to try to make the numbers work in your favor.
Ready, set, go! It’s time to take the first step
The hardest part is just getting started.
Do these 5 steps and the rest will fall into place. You don’t need to have everything figured out before you start. Pick your strategy, know your numbers, build your team, and start looking. You got this!