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Why You Should House Hack in El Paso

Are we in arguably the most competitive real estate market the United States has ever seen? Absolutely we are. El Paso, Texas is no different from the rest of the country facing challenges with housing affordability. While you may have a desire to be a homeowner, you probably already know that you have your work cut out for you.

One of the best decisions you make is choosing to house hack especially in the El Paso area. Today, we go over why house hacking is a wonderful option if you’re trying to own a home. Let’s get into it! 

What’s House Hacking All About?

So before we get into house hacking in El Paso, here’s how it works. House hacking is when you rent out a portion of your primary residence in return for extra income. Typically, house hacking is done within a duplex or triplex (multi-family) home. As the homeowner, you provide living space in the floors above or below you for instance. 

The extra rent income helps offset your mortgage and other living expenses. In the best case scenario, you live completely rent free or even generate positive cash flow every month!

What You Should Expect with House Hacking

While the idea of house hacking sounds glamorous, you should be well-aware of the challenges of this strategy. If done correctly, you can benefit from reduced living expenses and less pressure every month to pay back your mortgage. However, it’s going to require more of your time and effort to make sure your home is habitable. 

Prepare for Paying Insurance and Higher Rates

It costs more money to insure a multi-family home. Interest rates are also higher for multi-family homes. Know that you’ll have a more expensive deal on your hands ahead of time. You should also expect to pay at least 15% on your down payment before you move in. While you negotiate with a lender, make sure you let them know that you will be living there rather than renting out the whole property. Lenders are more likely to view you as less of a risk if the homeowner is living there too. 

Set Aside Money Every Month

As you share your primary residence in El Paso, make sure your tenants are satisfied at all times. Build your reputation as a landlord by having open communication with your tenants. Always be prepared if they have concerns or report any needed repairs. Even though this may seem scary, most repairs are common fixes and won’t run your wallet too deep. The key is to keep checking with tenants before small problems turn into bigger, costly ones. 

Know the El Paso Rules

Just like anywhere else in America, El Paso has their own unique laws. You’ll have to be up to date with fair housing and discrimination when you choose tenants. Additionally, you need a clear rent collection policy and make specific disclosures within your agreement between you and tenants. Finally, Texas has a security deposit law that covers several scenarios with leaving tenants. You could take a look at the full list of rules here.

The Benefits of House Hacking in El Paso

It’s essential to know what you’re getting into when you decide to house hack. If you can manage what’s expected of you as a homeowner and landlord, then congrats! House hacking in El Paso might just be for you. There are plenty of advantages if you decide to go forward with your El Paso house hacking strategy. Here’s why you should go for it. 

Affordable Cost of Living

Cities are hot spots around the country. The problem is, many of these cities such as New York and Boston have skyhigh expenses if you live there. Even growing cities such as Dallas and Atlanta are facing higher costs of living. El Paso is a city with booming growth, but it’s affordable too. You don’t have to pay state income tax which can’t be said about other areas. 

El Paso sits significantly lower than the US average cost of living index. The US average cost of living for housing has an index score of 100. Scores lower than 100 are known as affordable while scores higher than 100 are more expensive. El Paso’s housing cost index is rated at 56.5 which is well below the Texas average of 84.3. That means by house hacking in El Paso, you benefit from great value associated with housing costs!

Booming Job Market

It’s common for landlords to worry about the economy in their local area. You may worry about your own security as well as the security of your tenants. Additionally, areas that have poor job markets don’t create attraction for new residents. This may cause vacancies as landlords struggle to find renters because nobody wants to live in that city or town. 

This is far from the case with El Paso. The job growth is thriving in the city so you won’t struggle with finding tenants. Some companies have headquarters in El Paso, while others keep a prominent presence here. El Paso is growing in the technology and finance sectors with job opportunities for everybody. More people are moving into the city than ever before.

El Paso is a House Hacking Gem

If you’re deciding on house hacking but don’t know where to look, start with El Paso. It’s a wonderful city filled with sunshine, growth opportunities, and fantastic housing value. While you should be aware of the challenges with house hacking, El Paso makes it much easier than other cities. You might just find this area as your prime house hacking location as you start your real estate journey!


Brian Burds

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