Free Tool

House Hacking Calculator

Buy a duplex with 3.5% down. Live in one side. Rent the other. Run the numbers to see what your effective housing cost actually is — and whether you can live for free.

The Property
$
%
%
$
$
$
Rental Income

Duplex = 1, fourplex = 3

$/mo

Bedrooms rented out

$/mo
Reserves
$

Owner pays

%
%
Or load an example
Your Net Housing Cost
$2,482/mo
PITI $3,807 − $1,750 rent + reserves + utilities.
PITI Payment
$3,807/mo
PI $2,928 + TI $667 + FHA MIP $212
Gross Rent Collected
$1,750/mo
Before reserves
Monthly P&L
PITI-$3,807
Utilities (owner-paid)-$180
Maintenance reserve (8%)-$140
Vacancy reserve (6%)-$105
Gross rental income+$1,750
Net housing cost-$2,482
vs. Renting a Comparable Place
Renting equivalent: ~$2,400/mo (0.5% rule estimate). You're effectively $-82/mo ahead on housing cost — before counting equity paydown, appreciation, and tax benefits.
Conservative scenario: Vacancy + maintenance reserves are budgeted, not guaranteed expenses. In a great year you keep both. In a bad year (HVAC + 2 months vacant) reality hits worse than the model. Plan for the median, reserve for the tail.
The Strategy

Why house hacking is the best first move

FHA at 3.5% down on 1-4 units. A fourplex at $620k costs $21.7k down. Conventional investor loans on the same property would demand $155k.

75% of projected rents qualify you. First-time buyers regularly buy $500k+ properties on $60k W-2 income because FHA counts the rental income from the other units toward qualification.

Live for free or close to it. Net housing cost can hit zero or negative. Even a $400/mo net cost on a $480k duplex beats $1,800 rent — and you're building equity on the side.

Repeat every 12 months. Refi to conventional, move to a new house hack with another FHA, keep stacking units. This is how operators build 8-20 unit portfolios on a W-2 salary.

FAQ

Frequently asked questions

What is house hacking?+
House hacking is buying a 2-4 unit property (or a single-family with spare bedrooms), living in one part, and renting the rest. The rental income covers most or all of your mortgage. You get to live for free (or close to it) while a tenant pays your housing cost and you build equity.
Why FHA for house hacking?+
FHA loans allow 3.5% down on owner-occupied 1-4 unit properties. So you can buy a fourplex worth $600k with only $21k down. Conventional investor loans demand 20-25% down. FHA is the single most powerful entry point into multifamily real estate for first-time buyers — it's the strategy every serious investor we know started with.
Can I count rental income to qualify?+
Yes. FHA lets you use 75% of projected rents from the non-occupied units to help you qualify (the 25% haircut is the lender's vacancy/expense reserve). You need a rental schedule from an appraiser (Form 1007 or 1025). On a fourplex this can dramatically increase what you qualify for — buyers regularly qualify for $500k+ purchases on $60k W-2 income because of this.
What counts as 'living for free'?+
True 'living for free' means net housing cost (PITI + utilities you pay + maintenance reserve + vacancy reserve − rental income) is zero or negative. Many house hacks get partway there: $1,800 PITI − $1,400 rent = $400 effective rent. That's still beating renting a comparable apartment by $1,000-1,500/month. Don't let perfect be the enemy of good.
What about PMI on FHA?+
FHA loans have two mortgage insurance fees: an Upfront MIP (1.75% of loan, financed in) and an Annual MIP (~0.55-0.85% of loan, paid monthly). Unlike conventional PMI, FHA MIP doesn't drop off automatically — for most modern FHA loans it lasts the life of the loan. The workaround: refinance into a conventional loan once you have 20% equity (typically 2-4 years in via appreciation + paydown).
How long do I have to live there?+
FHA requires owner-occupancy for at least 12 months. After that, you can move out and keep the FHA loan in place as a rental. The standard play is: buy with FHA, occupy 12 months, refinance to conventional + move out, repeat with a new FHA loan. You can only have one FHA loan at a time in most cases.
What expenses do I need to budget for?+
PITI (principal + interest + taxes + insurance), HOA if applicable, utilities you pay (often water/sewer for multi-unit), repairs/maintenance (budget 8-12% of rent for older buildings, 5-8% for newer), vacancy (5-8%), capex reserve for big items (roof/HVAC/water heater), and management cost (zero if self-manage but valued at 8-10% if you account for your time).
Should I rent units or rent bedrooms?+
Both can work. Renting separate units gives privacy and easier exit (you're a real landlord). Renting bedrooms with shared kitchen gets you more cash flow per square foot but you're living with roommates. Most house hackers start with rooms in their primary residence (lowest barrier) then graduate to duplex/triplex. Cash flow per sqft is usually higher renting rooms; lifestyle is better renting units.
What's the catch?+
(1) You're a live-in landlord — tenant problems are 30 feet away. (2) Privacy goes down. (3) Tax treatment is split: portion you live in = personal, portion rented = business — you'll need an accountant who understands this. (4) FHA properties have stricter appraisal standards (safety + condition) which limits which deals you can buy. (5) Owner-occupant insurance + tenant requires landlord-style policy add-ons.
How does this compare to just renting?+
Even a 'break-even' house hack beats renting because (a) you build equity via paydown, (b) you get appreciation on a much larger asset than your own savings, (c) you get tax benefits (mortgage interest, depreciation on rented portion). A house hack that costs you $300/mo net might be the equivalent of saving $2,000/mo in wealth-building terms vs. paying $1,500 rent. Run the calculator with realistic numbers, then compare apples-to-apples.
Related tools

Stacking the strategy

Cash-on-Cash
Once the unit's a rental, calc the yield.
BRRRR Calculator
Force value + refi out of the house hack.
Cap Rate Calculator
Pre-tax property yield.
Cost Segregation
Tax savings on the rented portion.
NOI Calculator
Build the income side.
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