House Hacking Calculator
See what it really costs to live in a 2-4 unit property while renting the other units to tenants. Enter your mortgage, taxes, insurance, and the rent on each unit to calculate your net out-of-pocket housing cost after house-hack income.
What Is House Hacking?
House hacking is buying a 2-4 unit property (duplex, triplex, or fourplex), living in one unit as your primary residence, and renting the remaining units to tenants. The rental income offsets your mortgage, often making your net housing cost zero or negative. Because it is owner-occupied, you qualify for low-down-payment financing — FHA at 3.5% down, conventional at 5%, or VA at 0% — instead of the 20-25% down typically required for investor loans.
How the Math Works
Your total monthly PITI (principal, interest, taxes, insurance, plus HOA) is the fixed cost. Rental income from the other units reduces that cost. After subtracting vacancy, repairs, and any utilities you cover, the result is your effective housing cost. In strong markets a duplex house hack often produces $500-$1,500/month in savings versus renting a comparable apartment — plus you build equity and get mortgage interest and depreciation tax deductions.
FHA vs Conventional Down Payment on a Multi-Family
FHA allows 3.5% down on 1-4 unit owner-occupied property, but charges upfront MIP (1.75%) and monthly MIP for the life of the loan (on new FHA with less than 10% down). Conventional loans now require 5% down on a 2-unit, 15% on 3-4 units. Rates, mortgage insurance cost, and loan limits should all be compared. For most first-time house hackers, FHA wins on down payment while conventional often wins on monthly cost after MIP.
Planning the Exit
Most house hackers plan to move out after 12-24 months, convert the owner-occupied unit to a rental, and repeat. Because the 1-year occupancy requirement is satisfied, the whole property becomes a rental at investor-loan terms you bought at owner-occupied terms — a permanent advantage. Running the after-move-out cash flow in a rental cash-flow calculator confirms whether the property stands on its own as a pure investment.
Frequently Asked Questions
What is house hacking?
House hacking is buying an owner-occupied 2-4 unit property, living in one unit, and renting the rest. The rental income offsets your mortgage and operating costs — often enough that your net housing cost is near zero. It is one of the most efficient on-ramps into real estate because owner-occupied financing allows very low down payments.
What financing can I use to house hack?
Owner-occupied 1-4 unit financing: FHA (3.5% down), conventional (5% down on a duplex, 15% on 3-4 units), or VA (0% down, eligible veterans). These are dramatically more generous than investor loans, which typically require 20-25% down for multi-family properties.
How long must I live in the property?
FHA, conventional, and VA owner-occupied loans require you to occupy the property for at least 12 months. After that year, you can move out and convert the unit to a rental, turning the entire property into an investment without refinancing.
Do I need to report rental income for tax purposes?
Yes. Rents received must be reported on Schedule E. The good news: you can deduct a proportional share of mortgage interest, property tax, insurance, utilities, repairs, and depreciation against that rental income. Proper allocation between personal and rental space can lead to significant tax savings.
Does house hacking work with a single-family home?
A true house hack typically requires separate units with their own entrances and kitchens. Renting out spare bedrooms in a single-family home (sometimes called room-hacking) is a lighter version — it still offsets housing cost but generates less rent, has no rental-income financing benefit, and requires sharing your living space.
What is the biggest risk of house hacking?
Bad tenants — because they live a wall away. Careful tenant screening (credit, income, references) and clear lease terms (noise, parking, pets) are critical. The financial upside is large, but so is the day-to-day quality-of-life impact if you pick the wrong tenant.