House Hacking Calculator

House hacking: the fastest way in

House hacking is the single most efficient way to start investing in real estate. You buy a primary residence, occupy part of it, and rent the rest, whether that's the other units of a duplex, a basement apartment, an ADU, or spare bedrooms in a single-family home. Because you're living there, you qualify for owner-occupant financing (FHA at 3.5% down, VA at 0% down, conventional at 5% down for 1-unit or 15% for 2-4 unit). That's leverage most investors never get on pure rentals.

The four flavors of house hacking

• Small multifamily (2-4 units). Best for privacy and scale. You occupy one unit and rent the rest. FHA and VA allow this on any 1-4 unit property as long as you occupy one unit for at least a year.
• ADU or basement apartment. Buy a single-family home with a legal accessory dwelling unit. You get privacy plus a full rental unit. Zoning matters — check for legal ADU status before you buy.
• Rent-by-room. Rent spare bedrooms in a single-family home to roommates. Highest gross rent per square foot, lowest privacy, easiest to start.
• STR house hack. Rent one part on Airbnb while you live in the other. Higher upside, more work, more regulatory risk — check local short-term-rental rules first.

FHA and VA are the unlock

An FHA loan lets an owner-occupant buy a 1-4 unit property with 3.5% down as long as they live in one unit for at least a year. That means a $500,000 duplex needs $17,500 down instead of the $125,000 an investor loan would require. VA loans go further: 0% down for eligible veterans on 1-4 units. Both programs let you count 75% of the projected market rent from the units you won't occupy toward your qualifying income, which is often the difference between qualifying and not.

What "living for free" actually means

Living for free means your effective rent income covers your total monthly housing cost (mortgage, taxes, insurance, HOA, and a maintenance reserve). It doesn't mean rent covers just your mortgage. Investors who skip the maintenance and vacancy reserves end up surprised the first time a water heater fails or a tenant moves out mid-lease. This calculator bakes both in.

The compounding move: rinse and repeat

The real magic isn't the first house hack, it's the second and third. After 12 months you can move out, keep the property as a full rental (all units now generating rent), and buy another owner- occupied 1-4 unit with another low-down-payment loan. Do this three or four times and you have a portfolio of 8-16 units bought with owner-occupant financing, most of them cash-flowing after your occupancy period ends.

Glossary

• PITI: principal, interest, taxes, insurance — the four components of a monthly mortgage payment.
• ADU: accessory dwelling unit, a legal second living unit on a single-family lot (basement conversion, garage conversion, backyard cottage).
• Owner-occupant loan: mortgage that requires you to live in the property, usually for at least 12 months. Lower rates and down payments than investor loans.
• Effective rent: gross rent multiplied by one minus your vacancy rate — what you actually collect on average.
• Forced savings: the portion of each mortgage payment that pays down loan principal, building your equity.