See how much you can save and earn by house hacking — buying a multi-unit property, living in one unit, and renting the others to cover your mortgage.
| Scenario | Monthly Cost | Break-even Rent | Status |
|---|---|---|---|
| With House Hacking | $314 | $1,260 | ✓ Profitable |
| Without House Hacking | $3,779 | — | |
Break-even rent is the minimum rent per unit needed to cover your total housing cost. Your current rent of $1,500 per unit is $240 above break-even.
Where:
House hacking is a real estate investing strategy where you purchase a multi-unit property (duplex, triplex, or fourplex), live in one of the units, and rent out the remaining units to tenants. The rental income from your tenants helps cover your mortgage, property taxes, insurance, and other expenses — sometimes entirely.
This strategy allows you to build equity in real estate while dramatically reducing — or even eliminating — your own housing costs. For many first-time homebuyers, house hacking is the most accessible path to real estate investing because you can qualify for an owner-occupied mortgage (FHA, conventional, or VA) with a lower down payment.
House hacking works best in markets where rental demand is strong and the price-to-rent ratio is favorable. The goal is to have your tenants' rent cover as much of your total housing cost as possible, ideally leaving you with little to no out-of-pocket housing expense.
With the right numbers, your tenants' rent can cover your entire mortgage payment, letting you live rent-free.
Your tenants pay down your mortgage principal each month, building your net worth while you sleep.
Depreciation, mortgage interest, repairs, and operating expenses on the rental portion are tax-deductible.
For an FHA loan, you can put as little as 3.5% down on a 1-4 unit property as long as you live in one of the units. Conventional loans typically require 5-15% down for multi-unit owner-occupied properties. VA loans (for eligible military) and USDA loans can offer 0% down on multi-unit properties that meet their requirements.
Yes! While traditional house hacking involves multi-unit properties, you can also house hack a single-family home by renting out rooms to roommates, or by purchasing a property with an accessory dwelling unit (ADU) or basement apartment. This is sometimes called "room hacking" and works well in college towns and high-cost cities.
FHA loans allow you to purchase up to 4 units as long as you occupy one of them. This means you can buy a fourplex with just 3.5% down. However, FHA mortgage insurance premiums (MIP) will apply for the life of the loan if your down payment is less than 10%.
Key risks include: vacancies (loss of rental income), difficult tenants (evictions, damages), unexpected maintenance costs, interest rate increases on adjustable-rate mortgages, and the responsibility of being a landlord. It's important to have a cash reserve of 3-6 months of expenses before starting. Our calculator accounts for vacancy and maintenance to help you stress-test your numbers.
With a rental property (investment property), you don't live there and you typically need 20-25% down. With house hacking, you live in one unit, which qualifies you for owner-occupied financing with lower down payments and better interest rates. House hacking also lets you use your personal residence as a rental business, which can be more tax-efficient.
The 1% rule states that the monthly rent from a property should be at least 1% of the purchase price. For house hacking, you'd want the total rent from all your rental units to meet this threshold. For example, a $500,000 fourplex should generate at least $5,000/month in total rent across all units (including the one you live in, though you don't collect rent from yourself).
This calculator provides estimates for educational purposes only. Actual mortgage rates, taxes, insurance, and rental income will vary based on your specific property, location, credit profile, and market conditions. Always consult with a qualified real estate agent, mortgage professional, tax advisor, and attorney before making any real estate investment decisions.
House hacking involves risks including tenant vacancies, property damage, unexpected repairs, and changes in market conditions. Past performance does not guarantee future results.