Rent hacking is when you rent a home or apartment with more space and rooms than you need. Instead of filling the additional rooms with random items, you rent out the rooms to other people. This allows you to use the rent from those rooms towards the rent you owe to the landlord.
The rent hacking strategy is like house hacking. Both strategies are used by savvy individuals looking to reduce their housing expenses. However, there are some key differences that make rent hacking different from house hacking:
1. The first key difference is that to start rent hacking in the first place, you have to get permission from your landlord. This means that even if you find a rental that’s set up perfect for rent hacking, if your landlord says you can’t sublease the additional rooms – you can’t rent hack.
2. The second key difference is that rent hacking requires a lot less money upfront compared to house hacking. You don’t need a lot of money for a down payment or have to be responsible for a loan. As long as you can pass the rental criteria set by the landlord and have your security deposit – you’re ready.
3. The third key difference is that while rent hacking requires less money upfront, you miss out on a lot of the benefits that a homeowner would get. This includes mortgage pay down, appreciation, and tax benefits.
4. The fourth key difference is that with rent hacking, you don’t have to worry about performing any repairs or maintenance. Since you still have a landlord, they will continue to handle maintaining the property. This makes your overall expenses more predictable (which is always nice).
Overall, you can see that rent hacking is a smart strategy for lowering your housing expenses and improving your financial health. While similar to house hacking, there are a few differences that separate the two.
If you’re interested in lowering your housing expenses and aren’t ready to house hack, I recommend giving rent hacking a try. Use it as a stepping stone to help you save money and transition into house hacking.