House Hacking 101

Real Estate

You may be wondering, what the heck is house hacking?  Well, it’s a style of real estate investing that many people are already doing without knowing it.

House Hacking

The simple definition of house hacking is when you are living in a property and renting out either rooms or another unit to tenants.

It’s a live-in rental if you will.

House Hacking Scenarios

You want buy your own home, but you would also really like to own a rental property.

In this case there are a couple of things you can do:

Purchase a Multi-Family (duplex, tri-plex, etc.)

By purchasing a duplex instead of a home, you are accomplishing both goals.

You have your own private residence, while also having a rental unit.

Purchase a Single Family Home

If you don’t mind having roommates, you can still buy the single family home you desire and then rent out the other rooms.

Why Would Anyone Want To Do This?

There are two key reasons I can think of:

  • You want someone else (renters) to essentially pay your mortgage and tax bill, which in turn creates a low or no cost housing expense for yourself.
  • You want to buy something that is a stretch for you financially, thus taking in rent now makes the property suitable for your financial budget.

The Kicker

Since you are buying as an owner occupant you will be able to qualify for things like an FHA loan.  That loan allows for smaller down payments, usually 3.5 percent.   This can come in handy if you are not able to come up with 20 percent, which is required for most investment loans.


There you have it, the basics of house hacking and why people look to do it.

If you enjoy my posts and property investing tips than you will love the new book:

ScaredyCatGuide – Investing in Rental Properties

I literally walk you step-by-step through finding, buying and renting out a rental property.  The book is like your personal mentor!

Don’t forget to download the property calculator so you can run the numbers and “buy right”– my gift to you

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