House Hacking Calculator

What is house hacking?

House hacking means buying a property, living in one unit, and renting the others to offset your mortgage. Common setups: a duplex where you live in one half and rent the other; a single-family with an ADU; or a 3–4 unit small multifamily. Because you occupy the property, you can use owner-occupied financing — FHA (3.5% down), conventional (3–5% down), or VA (0% down for eligible veterans) — rather than the higher down payments and rates required for pure investment property loans.

Owner net housing cost is what you pay out of pocket each month after collecting rent: total PITI + maintenance reserve, minus net rental income. The rent offset percentage shows what fraction of your total PITI tenants are covering.

Owner-occupied financing advantage

The core advantage of house hacking is access to low-down-payment owner-occupied loans. A pure investment property duplex typically requires 20–25% down at a rate 0.5–1% higher than a primary residence. With house hacking:

• FHA loans: 3.5% down on 1–4 unit properties; up to 100% of the rental income from other units can count toward qualification.
• Conventional (Fannie/Freddie): 3–5% down on 1–4 units occupied as primary residence; rental income also helps qualify.
• VA loans: 0% down for eligible veterans on 1–4 units; the rental income from other units can be factored into the debt-to-income calculation.

On a $400,000 duplex, the difference between 5% down ($20,000) and 25% down ($100,000) is $80,000 of capital you keep invested elsewhere.

Worked example

You buy a duplex for $400,000 with 5% down ($20,000) at 7.0% for 30 years. Annual property taxes: $4,800. Homeowner insurance: $1,800. Maintenance reserve: 1% of value ($4,000/yr = $333/mo). Tenant unit rents for $1,400/month; vacancy at 5%.

Monthly P&I: $2,529. Taxes: $400. Insurance: $150. Maintenance: $333. Total PITI + maintenance: $3,412.

Gross rental income: $1,400/mo. After 5% vacancy: $1,330. Net rent income: $1,330.

Owner net housing cost: $3,412 − $1,330 = $2,082/month. Rent offset: 39% of PITI covered by the tenant.

Compare this to renting a comparable unit for $2,500/month: the duplex buyer saves roughly $5,000/year in housing costs while building equity.

Frequently asked questions

What properties can I house hack?

Any 1–4 unit residential property qualifies for owner-occupied financing as long as you live there as your primary residence. The most common choices are duplexes (2 units), triplexes (3 units), and quadplexes (4 units). Single-family homes with an accessory dwelling unit (ADU) — basement apartment, garage conversion, backyard cottage — also work. Beyond 4 units, the property is classified as commercial and requires different financing.

How long do I have to live in the property?

FHA loans typically require 12 months of owner-occupancy. Conventional Fannie Mae and Freddie Mac loans are less prescriptive but have language against purchasing a primary residence without intending to occupy it. After the seasoning period, you can move out and convert the entire property to a rental. Talk to your lender about their specific terms.

Does rental income from the other units count toward mortgage qualification?

Yes, on multifamily properties lenders can count projected rental income from other units to help you qualify. FHA allows up to 75% of market rent from non-owner units; conventional loans vary by lender. This means the property effectively qualifies at a higher income than your own W-2 alone — a significant advantage for first-time buyers or buyers in high-cost markets.

What maintenance reserve percentage should I use?

A common rule of thumb is 1% of the property value per year for reserves — roughly equivalent to CapEx and maintenance combined. In practice, older properties in cold climates run higher (1.5–2%); newer construction in mild climates runs lower (0.5–1%). This calculator lets you adjust it. The reserve is a critical input: underestimating maintenance is the most common reason house hacking results look better on paper than in practice.

What is the difference between house hacking and renting out a spare room?

Renting a spare bedroom in a single-family home is a form of house hacking, but it differs from multi-unit house hacking in a key way: the mortgage payment stays the same regardless of the tenant, and you share living space. Multi-unit house hacking gives each party their own unit. The financial math is similar — rent offsets your mortgage — but the privacy and management dynamics differ substantially. This calculator models multi-unit setups; for room-rental, the inputs are the same but the rental unit count is just one room.

What happens to my taxes when I house hack?

The rental portion of the property can generate deductible expenses: a proportionate share of mortgage interest, property taxes, insurance, maintenance, and depreciation. The owner-occupied portion still qualifies for the mortgage interest deduction (on the primary residence share). You will file Schedule E for the rental income and expenses. If you later sell, the rental portion may be subject to depreciation recapture and capital gains tax, while the owner-occupied portion may qualify for the primary residence exclusion (up to $250,000 single / $500,000 married). Consult a tax professional for your specific situation.

Formulas last reviewed October 25, 2026. Results are estimates for educational use; not financial advice. Methodology →