House Hacking Calculator
Buy a duplex or rent out spare rooms. See whether your tenants cover your mortgage — or pay you to live there.
What house hacking actually is
House hacking is buying a property as an owner-occupant — qualifying for the much better financing terms that come with that — and renting out part of the property so that the tenants effectively cover all or most of your housing costs. It's the single most accessible way for someone with limited capital to start building a real estate portfolio.
The big unlock is the loan terms. Owner-occupant financing means:
- 3.5% down with FHA (vs 20–25% for investor loans)
- 5% down with conventional, sometimes 3% for first-time buyers
- 0% down with VA if you qualify
- 0.5–1.5% lower interest rate than investor mortgages
- No reserves required beyond closing costs
The catch: you have to actually live there for at least 12 months. After that, you can move out and rent the unit you were occupying, turning the whole thing into a rental.
The three flavors of house hacking
- Multi-unit (duplex, triplex, fourplex) — you live in one unit, rent the others. The cleanest version. Maximum is fourplex; five+ units becomes commercial.
- Rent-by-the-room — buy a single family with 3-5 bedrooms, live in the master, rent each spare room individually. Often higher gross rent but more tenant management.
- ADU / basement / garage conversion — buy a SFH with a separate accessory dwelling unit (or build one), live in the main house, rent the ADU.
You buy a duplex for $425,000 with 5% down ($21,250) on a 30-year conventional loan at 6.5%. PMI runs $180/month. Property taxes are $5,400/year, insurance $1,800/year. You pay all utilities ($220/month).
The other unit rents for $2,400/month. You set aside 12% for vacancy and maintenance.
If a comparable apartment in your area rents for $2,100/month, you're saving $660/month vs renting. Over a year that's $7,920 saved, plus you're building equity through loan paydown and appreciation.
Why house hacking is the best first-deal strategy
- Tiny down payment — you can start with $15-25K instead of $80-100K.
- Better rates — owner-occupant rates beat investor rates by ~1% on average.
- Live for free, then keep the asset — after 12 months you can move out, rent the whole thing, and now you own a cash-flowing rental bought on owner-occupant terms.
- Real-world landlord training — you're feet away from your tenants. You'll learn what makes a good lease, what tenants complain about, and how repairs work.
- Tax benefits — the rental portion gets depreciation, expense write-offs, and other landlord tax treatment.
The drawbacks: you have to live next to tenants for at least a year, you have to actually be a landlord (with the noise complaints and 2 AM plumbing calls), and you can't pick a property purely on investment math — you also have to want to live there.
Frequently asked questions
How long do I have to live there?
Both FHA and conventional owner-occupant loans require you to live in the property for at least 12 months as your primary residence. After that you're free to move and convert the whole thing to a rental.
Can I do this more than once?
Yes. The technique is called "serial house hacking" — buy a duplex with 5% down, live there a year, move out, buy another duplex with 5% down owner-occupant, live there a year, and so on. After 4–5 years you can own 4–5 small multifamilies you bought on owner-occupant terms. Lenders allow this; each new property just needs to genuinely be your new primary residence.
What about FHA loan limits?
FHA limits vary by county — usually $498K for single-family, higher for multi-units (1.28× for duplex, 1.55× for triplex, 1.93× for fourplex). In high-cost areas these go much higher. Check FHA loan limits for your county before house-hunting.
Will lenders count the rental income?
Yes, but conservatively. Most lenders count 75% of expected rental income from the non-owner units toward your qualifying income. They'll want a market rent appraisal from the property itself (not Zillow estimates) to confirm the numbers.
Do I need landlord experience?
No. First-time buyers with no rental experience do house hacks all the time. You'll learn fast — and having tenants right next door means you can't avoid the learning curve.
Rates, loan limits, and PMI requirements change frequently. Always confirm exact terms with a lender. Local landlord laws vary by city and state — check tenant rights regulations before you buy.