As the economy has shifted over the past few months – I’ve had a lot of people expecting to get “more house” for less again.
Unlike most of the country – where real estate values have given back most of what was gained during the pandemic – Knoxville and most of East Tennessee have continued to either maintain or increase a bit as memories of lockdowns are fresh, the cost of living and tax rates in “marquee areas” continue to skyrocket and the threat of economic crash looms with each meeting of the Federal Reserve. The rate of relocations to the area has decreased but it still persists. Sure, we’ve had reductions in some of the higher price points – but buyers I’ve worked with are still finding it a real challenge to actually find housing in our “bread and butter” price point – between $300,000-$425,000. It’s really not that there’s a lack of homes in that range – it’s that the homes that are selling there now were on the market two years ago for 30% less and the mortgage interest rate was half what it is now.
While all this is true – this dismal industry snapshot is a cloud with a silver lining! In the past few years with the growth of the Minimalist movement coming from the west and the growth in interest for Millennial generation buyers – people are getting smarter and more ambitious! Only recently the concerns about the price point has shifted to more and more interest in “House Hacking” as popularized by the Bigger Pockets podcast and other outlets that teach their listeners how to monetize their lifestyles.
You’ve probably noticed the booming “Influencer” culture where people are paid in the high six-figures or even much more for attractive young people to film videos of themselves applying make-up or even less attractive dad-types fixing your dishwasher on YouTube. I’ve noticed that the House Hacking trend has spawned a new attitude from the more savvy, young homebuyer. Many of them want the most house they can purchase (finding work-arounds for the limits of credit, down-payments by finding what help might be available from other sources) with the caveat that the place they purchase HAS to be hackable.
What does this have to do with being an Influencer? The common way to monetize one’s Influencing potential has been in the Macro-Influencer efforts to get as many eyes on your productions as possible. The new buyers are looking for a more realistic, yet still very lucrative Micro-Influencer plans involving getting someone else to pay for their “Super Nice house.”
“I don’t care what it costs,” one extremely smart young buyer told me this week. “I just have to figure out how to live there for free.” I was a little taken aback from the comment – then he explained.
The Micro-Influencer home has to have hackable spaces: A garage (ideally with a loft) that can be converted to an apartment, an outbuilding or space that can be turned into living space, an old tool shed that can be turned over in the same way or even an attic with a floor and exterior access. There are many other ways that someone can add living space without changing the current footprint of your home. In the past few months – Knoxville and other local municipalities have changed the laws to allow one ADU (Additional Dwelling Unit) inside the current home footprint.
If you do this right, choose the correct home or find an area where the rules are even more flexible this can allow for 2 or more ADUs and while you still get to enjoy the better living spaces – while having friends, folks you know or others that are looking for a space to live – paying rent to you – as Knoxville area rents are outstripping the costs of homeownership by large amounts.
If you are hankering to get the income from the internet – a great way is to feature your space on Airbnb, VRBO or other short-term rental sites where (for a small portion of your nightly rental rate) you can double or triple the return on your lifestyle home choice!