Count Jelani Smith in the happy band who’ve made house-hacking work! What’s “house-hacking,” you ask? You buy a house, live in part of it and rent out the rest to help offset carrying costs.Smith occupies the main floor of his pretty Scarborough bungalow and rents out the basement apartment he created with the conversion to a legal duplex.
The numbers have to work, says Chan, who urges would-be house-hackers to consult a financial professional, such as an accountant or adviser. Smith has been diverting his cash to real estate since he bought a townhouse in Scarborough at the age of 22 in 2016. TheHe used equity from the townhouse for the $160,000-down-payment and $200,000 renovation on the 1970s bungalow he bought for $800,000 in May 2020.
“Start with what you can afford!” says Smith, who documents his duplex conversion and personal real estate journey on hisThe key to a successful house-hack, says Chan, is to buy a place for under $1 million. And one-third of Toronto’s semi-detached homes now fit in that price bracket. She notes that house-hacking helps buyers qualify for a mortgage because the rent money is included in their total income.Higher monthly carrying costs, compounded by today’s heftier interest rates, will be offset to varying degrees by higher rental prices, Chan says.