How to Live Rent-Free While Building Your BusinessWith this simple strategy, you'll have enough to cover monthly living expenses and may even turn in a profit.

ByBrandon Turner

Opinions expressed by Entrepreneur contributors are their own.

Building a business can be expensive in its own right, from hiring employees to renting office space and everything in between. And those expenses are in addition to your normal living expenses, such as phone service, insurance, car payments and more.

However, there's one unique way to lower your cost of living while building you business: live for free.

Related:You Deserve to Be a Millionaire. Follow These 12 Tips to Get There.

现在,我知道这听起来是天方夜谭。但是我所做的it, and you can too. Through the process of "house hacking," you can get others to pay your rent or mortgage while you focus your time, and money, on growing your business.

What is house hacking?

House hacking is a term I invented to describe the process of getting other people to pay your rent or mortgage.

Although there are several ways to house hack, the most common way is to buy a duplex, triplex or fourplex and live in one unit while renting out the others.

My first experience in "house hacking" was during college when I rented a four-bedroom apartment for $800 a month in Olympia, Wash., and rented each bedroom out for $400 a month. I quickly discovered that I could make even more money by renting outmybedroom and sleeping on the couch. Now, I don't recommend this, but for a poor college kid, I was getting paid to live for free.

Later, I purchased a duplex for my wife and I to live in. We stayed in the small one-bedroom home in the backyard and rented the larger house out. It was during this time that I seriously began building up my real estate investing business, thanks to my incredibly low cost of living. I was able to quit my job and go full time into flipping houses and buying rental properties. (This is the property I discussed inWhat Accidentally Buying Kurt Cobain's First House Taught Me.)

But I can't buy a house!

You'd likely be surprised how easy purchasing a house actually is, especially for house hackers.

Related:Don't Make These 2 Mistakes With Your Cash On Hand

House hackers are not seen as "investors," thus the qualification standards and down payment requirements are much more attainable. A lender will look at a duplex, triplex or fourplex in the exact same light as a single-family house or condo. This means that you have the ability to use a low-down payment loan such as an FHA loan, requiring just a 3.5 percent down payment (or, if you are a member of the U.S. Military, $0 down for a VA loan.)

It's also possible that you live in one of those insane markets where the cost of a duplex would be millions of dollars (hello San Francisco!). In this case, even a 3.5 percent down payment might run you tens of thousands of dollars and the property still won't prove to be a good investment. In that case, you may consider the idea of renting a property and subletting the bedrooms if you can make the numbers pencil out.

I have one friend in San Francisco who is paying $50 per night to rent a single bedroom in a house with 12 other people. If you do the math on that, the house owner is bringing in $18,000 per month for his trouble. I don't know what his home expenses are, but I doubt they are anything close to that.

The most important consideration for house hacking.

House hacking can be an incredible way to decrease your expenses while increasing the cash you can invest in your business. However, house hacking can also be dangerous if you don't buy the right property.

This is why I insist on you taking the time needed to learnhow to analyze a real estate deal. Make sure it's actually going to produce the results you want. Because, simply put, most properties are not worth buying. Just because it is a duplex or a large house doesn't mean it's going to allow you to live there for free. You have to shop smart, run the numbers carefully and know what you are getting into.

Questions? Comments? Let's chat more in the comment section below.

Related:3 Reasons Why Running Out of Money Will Make You a Better Entrepreneur

Brandon Turner

Real Estate Investor and Co-host of the BiggerPockets Podcast!

Brandon Turner is a real estate entrepreneur and the VP of Growth at BiggerPockets.com, one of the web’s largest real estate investing communities. He is also the author ofThe Book on Rental Property Investing,The Book on Investing in Real Estate with No (and Low) Money Downand several other books. Buying his first home at the age of 21, Turner quickly grew his real estate portfolio to over 40 units using a variety of creative finance methods. He and his wife Heather live in Grays Harbor, Wash.

Related Topics

Leadership

This 27-Year-Old Harvard Dropout Started a Hedge Fund Out of a Garage — Now She Manages Nearly $1 Billion in Assets

Eva Shang, who met co-founder and fellow Harvard undergraduate Christian Haigh at a club on campus, admits it's "very unusual for college students to start a hedge fund."

Business News

College Student's Tragic Death Sparks Legal Battle as Parents Sue Panera Over High-Caffeine 'Charged Lemonade'

A 21-year-old college student, Sarah Katz, purchased Panera Bread's Charged Lemonade and passed away hours later after going into cardiac arrest.

Business News

芭芭拉·科克兰的3我买房的好建议n the Current Housing Market

If you're looking to buy a home, the real estate mogul offered some sage advice on Instagram.

Business News

Reddit Co-Founder Alexis Ohanian Says the 'Surfer Mindset' Is the 'Right' Approach in Business and in Life. Here's Why.

The Reddit co-founder recently spoke to students at his alma mater, the University of Virginia.

Growing a Business

Prepare For This Seismic Shift in Employee Expectations — Or Say Goodbye to Your Top Talent.

If you are a business leader failing to account for this fundamental transformation in worker attitudes, prepare for a rude awakening.