BiggerPockets Daily

Looking for a way to offset skyrocketing housing costs while generating extra income? House hacking might be your answer. From renting out a room to converting your basement or even building an accessory dwelling unit (ADU), this strategy lets you leverage your primary residence for passive income. This guide breaks down modern house hacking, exploring options like small multifamily units, shared living spaces, and ADUs. We’ll also cover the practical steps to rent out part of your home, including prepping the space, understanding landlord-tenant laws, marketing effectively, and drawing up a customized lease. Whether you’re new to house hacking or a seasoned investor, this comprehensive guide offers actionable advice to maximize your returns while minimizing risks. Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

When I first dipped my toes into the world of house flipping, I was filled with excitement and a fair share of naiveté. I had dreams of turning rundown properties into beautiful homes and reaping the rewards of my hard work.  But, like many aspiring investors, I faced my share of setbacks. I experienced the sting of failure, but I learned invaluable lessons along the way that helped me rebuild and ultimately thrive in this business.  If I could go back in time, there are key insights I wish I had known from the start. Here are five things I’ve learned through trial and error—lessons that could save you from the pitfalls I encountered. Whether you’re just starting out or looking to refine your approach, these insights will help you avoid the mistakes that can turn your next flip into a flop.  Keep reading the article here: Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

The Raleigh and Charlotte, North Carolina, metros grew tremendously over the past five years, with a population growth of 11.53% and 8.81%, respectively (the U.S. average was 2.94%). Raleigh also had a 64.2% increase in its median price, while Charlotte experienced a 76.9% increase (the U.S. average was 46.9%). Keep reading the article here: https://www.biggerpockets.com/blog/north-carolina-could-be-the-next-boom-state Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Real estate investing is one of the best ways to build wealth, but there’s a hidden trap that even seasoned investors fall into—it’s called poor bookkeeping practices that quietly drain profits and put portfolios at risk. You may have written deals on a napkin or put the receipt for purchasing materials in your glove compartment before, but that could leave you scrambling at the worst times.  The bookkeeping, accounting, and banking system you choose will determine whether you avoid these headaches or continually “eat” those small charges that add up like sneaky calories in your favorite late-night snack. I know I’m guilty of letting multiple little purchases get miscategorized, forgotten, or even worse—charged to the wrong property. Over time, these little slip-ups can cost you thousands, and the only one who ends up happy about that is the IRS. The crazy thing is that real estate taxes and accounting nuances can work in your favor—when things are correctly documented and categorized. But getting it wrong? Well, that’s like building a house without a blueprint—risky, expensive, and more than a little stressful. Let’s break down the five most common bookkeeping mistakes real estate investors make that can lead to thousands of dollars slipping through the cracks—and, more importantly, how to fix them before it’s too late. Keep reading the article here: https://www.biggerpockets.com/blog/investors-can-lose-thousands-by-not-bookkeeping-right Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

If you are lucky enough to have a spare room in your house that is not filled with random junk, congratulations—you may be sitting on some extra cash. The threat of a roommate eating your leftovers is not as high as the cash flow you can bring in, so let’s dive into how to turn your extra room into extra revenue.  Once you find a tenant, our friends from Baselane will be able to help you screen the tenant, help collect rent online, and mange all your rental finances with a business checking account and free bookkeeping software. This will save you 2-4 hours of work per unit per month. Keep reading the article here: https://www.biggerpockets.com/blog/the-basics-to-renting-out-one-of-your-rooms Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

“I saved up a million dollars—and all I got was this lousy $40,000 a year.” That’s the metaphorical T-shirt that the average retiree wears.  Actually, it’s worse than that. The average retiree aged between 65 and 74 doesn’t have a million dollars saved as a nest egg. They have $609,230, and that’s the mean average, not the median. You can be sure the median is a lot lower.  Based on the traditional 4% rule, the average retiree takes an annual income of just $24,369 from that nest egg. Don’t blow the party kazoos all at once.  All this means that the traditional retirement model just doesn’t work well. To put it bluntly, the math sucks.  I can do better—and so can you.  Keep reading the article here: https://www.biggerpockets.com/blog/the-problem-with-paper-assets-for-retirement-planning Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Suburban migration didn’t end with the pandemic. If anything, we’ve seen a long-term shift in American priorities concerning housing, which has led to an increasing number of households moving out of the city and into the suburbs. When people head out to the ‘burbs, real estate investors would do well to follow. We have a saying in real estate that we look for the path of progress. Sometimes, this is revitalizing or rezoning areas to include new housing or businesses. Sometimes, it is simply the trend of where people are moving.  Keep reading the article here: https://www.biggerpockets.com/blog/8-reasons-suburban-housing-should-be-your-go-to-investment Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

In my previous article on the uniquely American suburbs, I delved into their controversial history. Here, I’ll focus on the political and social critiques of America’s particularly car-centric and sprawled form of suburban development. A third and final piece will look at the financial picture, as well as the suburbs’ viability, both for the country and investors. Conspiracy theories that the suburbs were created to drive demand for automobiles are, for the most part, backward. It was, in actual fact, the mass adoption of the automobile that drove the creation of the suburbs. Of course, big business (Levittown) and government policy (the creation of the interstate highway system and urban renewal) also played a part in the expansion of America’s car-centric suburbs.  But even if the causes of America’s suburban sprawl were completely benign, that doesn’t mean that the suburbs as currently constituted are good nor sustainable nor a place for quality, long-term investments. It is to these questions we now turn. Keep reading the article here: https://www.biggerpockets.com/blog/are-the-suburbs-a-soul-crushing-abomination Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

I wrote an article explaining why I am investing in real estate investment trusts (REITs) instead of rental properties. In short, REITs are still discounted, and I expect their lower valuations to result in higher returns in the coming years. Unfortunately, it would seem that many readers miss the point of investing in REITs due to misconceptions. I saw several people in the comment section claim that REITs should be less rewarding investments because:  - You don’t enjoy the benefits of leverage. - They are not tax-efficient. - You are paying managers instead of getting your hands dirty. But these statements are just plain wrong, and I am going to prove it.  Keep reading the article here: https://www.biggerpockets.com/blog/8-reasons-for-why-reits-are-better-than-rentals Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Certain cities across the United States are emerging as economic powerhouses, creating ideal conditions for real estate investors.  I’ve published two previous articles on cities with growing tech hubs and high income increases, both of which are highly correlated with price appreciation. Keep reading the article here: https://www.biggerpockets.com/blog/13-real-estate-hotspots-with-the-best-economies Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Affordable housing might be a priority for the government, but that doesn’t mean banks share the same view. According to a recent CoStar article, 11 federal home loan banks say that government pressure to fund their housing programs could threaten their stability. The Biden administration requires federal banks to contribute money through grants for affordable housing initiatives. According to a White House press release, the president proposed that “each Federal Home Loan Bank double its annual contribution to the Affordable Housing Program, which will raise an additional $3.79 billion for affordable housing over the next decade and assist nearly 380,0000 households.”  Keep reading the article here: https://www.biggerpockets.com/blog/banks-face-pressure-from-government-to-fund-affordable-housing-projects Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

If there’s a downside to investing in real estate, it’s dealing with nonpaying tenants. Many people prefer to put their money in the stock market because even with diligent screening, it’s inevitable that you’ll encounter tenants who fall behind on their rent. When that happens, your real estate becomes a massive headache. However, according to a recent article in the Wall Street Journal, rent problems could be well on their way out. Keep reading the article here: https://www.biggerpockets.com/blog/how-eviction-diversion-programs-are-driving-eviction-rates-down Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Does this scenario sound familiar? “I distinctly remember a conversation I had with my boyfriend shortly after submitting an offer on my very first rental property. We were sitting at his son’s Little League baseball game, and my mind was wandering (if you’ve ever watched a Little League baseball game, you understand). I turned to my boyfriend and said, ‘What happens if they actually accept my offer on that property?’  The truth of the matter was, I was a 28-year-old with not even an ounce of rental property or landlording experience. All I knew was that I was over working a 9-to-5 W-2 job and thought that real estate investing could be my path out. Ever the black-and-white, straight-to-the-point kind of guy, my boyfriend responded with, ‘You’ll figure it out.’ Little did I know how true that statement would turn out to be.” That’s Amelia McGee, co-author of The Self-Managing Landlord with Grace Gudenkauf, explaining her anxiety and fear as a soon-to-be DIY landlord. Keep reading the article here: https://www.biggerpockets.com/blog/pros-and-cons-of-being-a-self-managing-landlord Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Data privacy is an ever-increasing concern, particularly in finance, where sensitive information like personal and business bank statements, loans, credit information, driver’s licenses, and Social Security numbers are involved. Because of this, real estate is particularly vulnerable. The advent of artificial intelligence (AI), which allows more data to be transferred through apps and social media, further increases the need for robust laws and cybersecurity. Keep reading the article here: https://www.biggerpockets.com/blog/data-privacy-is-a-looming-crisis-that-could-create-upheaval Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Finding promising equity deals in today’s real estate market can feel like a needle in a haystack. Whether you’re an active or passive real estate investor, facing this challenge means it’s crucial to focus on making the most of your existing investments. By optimizing your current holdings, you can enhance their performance and ensure they align with your long-term goals—and put more money in your pocket along the way. Here’s a straightforward guide on how to do just that. Keep reading the article here: https://www.biggerpockets.com/blog/optimizing-your-existing-properties-when-deals-are-hard-to-find Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

When you start them early enough, your investments can perform shocking feats of strength. They can even keep pace with the runaway cost of college tuition—which has more than doubled since 2000. The average cost of private college tuition and fees has reached $38,768, according to the Education Data Initiative, and you can expect that to keep skyrocketing between now and when your little one reaches college age.  Fortunately, real estate can help. Try these creative approaches to paying for your kids’ college education so you can stop worrying and start getting excited about your children’s university years.  Keep reading the article here: https://www.biggerpockets.com/blog/creative-ways-to-pay-for-your-childrens-college-using-real-estate Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

You have finally decided to enter the short-term rental (STR) market, and your biggest concern is a call from the local fire department stating that your house is ablaze or that your guest is suing you for a twisted ankle during their stay. Luckily, if you prepare with the proper insurance and care for your property, these types of situations can be managed. Listing your property on Airbnb can bring in extra income—and extra headaches if you are not covered properly. Don’t rely on your regular homeowner’s insurance since it won’t cover the unique risks involved. Before renting, review your policy and look into add-ons or endorsements.  In this article presented by Baselane, we’ll discuss the details of Airbnb’s limited insurance coverage and guide you through essential considerations like vandalism, theft, unpaid rentals, and guest injuries. We’ll also highlight the best insurance options tailored to Airbnb hosts so you can protect yourself from costly surprises and potential losses. Keep reading the article here: https://www.biggerpockets.com/blog/what-kind-of-insurance-do-you-need-for-short-term-rentals Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Knowing how to price your rental property has been an issue since the dawn of time (or whenever the first rental was). Before the internet and modern technology, investors were driving around hoping to see a “for rent” sign and writing down (on paper) how much each place was going for.  Fast-forward to today, and calculating how much to set the rent for your property has changed dramatically. Let’s jump into how to correctly price your rental in today’s world from our friends at Baselane.  Keep reading the article here: https://www.biggerpockets.com/blog/how-to-calculate-rent-for-any-property Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

The last two years have felt like a slow-motion car crash in commercial real estate.  That goes for office space, of course, but it also goes for multifamily and other commercial property classes. Look no further than this piece by BiggerPockets if you need a refresher. Two regional banks went under because of the industry’s woes in 2023.  But even in one of the worst stretches for commercial real estate on record, many operators and passive investors have continued earning solid returns. Since 2022, I’ve invested in nearly 30 passive real estate deals as one more member of SparkRental’s Co-Investing Club. Of those, only one has imploded and resulted in a loss—and it was one of the first deals we invested in as a club.  One advantage to getting together with a group of other passive investors every month to vet deals is that you get better at doing it and quickly. This year, I’ve shifted how I think about risk.  As you continue (or start) investing passively in real estate, consider this framework for looking at risk. Keep reading the article here: https://www.biggerpockets.com/blog/the-extra-downside-protection-i-look-for-in-investments Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Pre-pandemic, short-term rentals (STRs) seemed to answer burned-out landlords’ prayers. Guests paid their money upfront, eliminating the need to evict, and homeowners could use their personal residences to earn extra income should they wish to travel or rent out individual rooms.  The hotel industry quaked and pressured cities to introduce restrictions. However, STR fever was rampant. Soon, entire apartment buildings were dedicated to the vacation rental phenomenon. Everyone with a granny flat, RV, and spare room seemed to be competing for STR dollars. Would it last? Were hotels over? Inevitably, some markets became saturated, and the narrative about short-term rentals changed amongst investors. Post-pandemic, the number of vacation homes in the U.S. increased by 23.3% from October 2021-2022. That spring, at the height of the STR booking season, 80,000-88,000 new short-term rentals were added to the market monthly. Bookings dropped, and landlords fretted. Hoteliers breathed a sigh of relief.  After a shaky couple of years due in part to the economic downturn, the short-term rental business is expected to grow at a stable pace. Equally, the hotel business in the U.S. is predicted to exhibit an annual growth of 3.8% (CAGR 2024-2029), with a projected market volume of $133.3 billion by 2029.  Keep reading the article here: https://www.biggerpockets.com/blog/is-investing-in-hotels-a-better-move-than-scaling-short-term-rentals Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors - https://www.biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices