House Hacking Calculator
House hacking means living in one unit of a small multifamily and renting the others, so the tenants' rent covers part of your mortgage. Enter the price, number of units, your unit, the other units' rents, the mortgage and costs, and this calculator shows your net monthly housing cost. If this would be your first rental, read becoming a landlord, step by step first.
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How to use the house hacking calculator
Enter:
- Price of the property.
- Units: two for a duplex, up to four for a fourplex.
- Your unit: which one you’ll live in. It matters when unit sizes and rents differ.
- Rents for the other units, from current leases or comparable listings.
- Mortgage: the monthly payment including principal, interest, property tax, insurance and any mortgage insurance.
- Costs: repairs, a capital expense reserve, utilities you pay for the whole building, and a vacancy allowance on the rented units.
The calculator returns your net monthly housing cost.
The house hacking formula
- Rental income = sum of rents from the units you don’t live in
- Net housing cost = mortgage payment + monthly costs - rental income
If the result is negative, the tenants cover all your housing costs and then some.
A worked example
You buy a $400,000 duplex with an FHA loan and 3.5% down ($14,000). The loan is $386,000 at 6.5% for 30 years.
- Principal and interest: $2,439.78
- Property tax: $400
- Insurance: $200
- Mortgage insurance: $175 (your lender will quote the real figure)
- Total payment: about $3,215
- Costs (repairs, reserves, shared utilities, vacancy allowance): $300
The other side rents for $1,800.
- Net housing cost: $3,215 + $300 - $1,800 = $1,715 a month
If a similar two-bedroom nearby rents for $1,700, you’re paying about the same to live here as to rent. The difference is that about $4,300 of your payments in the first year goes to principal, and the building is yours.
A triplex changes the math a lot. The price is higher, but with two units paying rent, the net housing cost can drop close to zero. Run both in the calculator before you decide what to shop for.
What a good result looks like
A good house hack has a net housing cost at or below the rent you’d pay for a comparable place, with a full set of costs counted. A great one leaves you living close to free.
Then check what happens when you move out. Rent your unit at market and run the numbers as a full rental. If it cash-flows as a pure rental too, you’ve bought a solid long-term property, not just a cheap place to live.
Limits and caveats
- Owner-occupancy rules. FHA and other owner-occupant loans require you to move in, usually within 60 days, and to live there as your main home, generally for at least a year. Don’t plan around moving out early.
- Vacancy hurts more. With one rented unit, a vacant month means you pay the full mortgage.
- Landlord rules still apply. Living on site doesn’t exempt you from deposit, entry, fair housing and eviction rules, though some owner-occupied buildings are exempt from certain local rent caps.
- Insurance. You’ll need a policy written for an owner-occupied multifamily, not a standard single-family homeowners policy. Ask an agent.
- Taxes. Only the rented part of the building is depreciated and generates rental deductions. Your tax preparer will split the costs.
Questions landlords ask
The questions we get most, each answered in a paragraph.
What is house hacking?
House hacking is buying a small multifamily property, usually a duplex, triplex or fourplex, living in one unit and renting out the rest. The rent from the other units pays part or all of your mortgage. It can also mean renting rooms in a single-family home. You get owner-occupant loan terms and learn to be a landlord while living on site.
Can I use an FHA loan to house hack?
Yes. FHA loans can be used for properties with up to four units if you live in one of them as your main home, with a minimum down payment of 3.5% for borrowers who meet the credit requirements. You'll pay mortgage insurance, and on three- and four-unit properties the lender also checks that projected rents can cover the payment. Ask an FHA lender for the current rules.
Will the lender count rent from the other units?
Usually, in part. Many lenders count a share of the expected rent, often 75%, toward your qualifying income, based on existing leases or an appraiser's rent estimate. The rest is held back for vacancy and expenses. Ask your lender how they treat rental income before you make an offer.
Is house hacking worth it?
It's worth it when your net housing cost is at or below what you'd pay to rent a similar place, and you're comfortable living next to your tenants. You also build equity and gain landlord experience with less risk than buying a rental outright. It's a poor fit if you value privacy or plan to move within a year.