House Hacking Calculator

Accelerate your path to financial freedom by being a live-in landlord

Mortgage

Additional Expenses

Rent Income

Principal and Interest

$718.47 /month

Additional Expenses

$450.00 /month

Average income

$930.00 /month

Net cash flow

-$238.47 /month

Principle Paydown

$251.80 /month

Overall Net Worth Impact

$1,013.33 /month
Month #PaymentInterestPrincipalLoan Balance
0000$160,000
1$718$467$252$159,748
2$718$466$253$159,496
3$718$465$253$159,242
4$718$464$254$158,988
5$718$464$255$158,734
6$718$463$255$158,478
7$718$462$256$158,222
8$718$461$257$157,965
9$718$461$258$157,707
10$718$460$258$157,449
11$718$459$259$157,189
12$718$458$260$156,929
13$718$458$261$156,669
14$718$457$262$156,407
15$718$456$262$156,145
16$718$455$263$155,882
17$718$455$264$155,618
18$718$454$265$155,353
19$718$453$265$155,088
20$718$452$266$154,822
21$718$452$267$154,555
22$718$451$268$154,287
23$718$450$268$154,019
24$718$449$269$153,750
25$718$448$270$153,480
26$718$448$271$153,209
27$718$447$272$152,937
28$718$446$272$152,665
29$718$445$273$152,392
30$718$444$274$152,118
31$718$444$275$151,843
32$718$443$276$151,567
33$718$442$276$151,291
34$718$441$277$151,014
35$718$440$278$150,735
36$718$440$279$150,457
37$718$439$280$150,177
38$718$438$280$149,897
39$718$437$281$149,615
40$718$436$282$149,333
41$718$436$283$149,050
42$718$435$284$148,767
43$718$434$285$148,482
44$718$433$285$148,197
45$718$432$286$147,910
46$718$431$287$147,623
47$718$431$288$147,335
48$718$430$289$147,047
49$718$429$290$146,757
50$718$428$290$146,467
51$718$427$291$146,175
52$718$426$292$145,883
53$718$425$293$145,590
54$718$425$294$145,296
55$718$424$295$145,002
56$718$423$296$144,706
57$718$422$296$144,410
58$718$421$297$144,112
59$718$420$298$143,814
60$718$419$299$143,515
61$718$419$300$143,215
62$718$418$301$142,915
63$718$417$302$142,613
64$718$416$303$142,311
65$718$415$303$142,007
66$718$414$304$141,703
67$718$413$305$141,398
68$718$412$306$141,092
69$718$412$307$140,785
70$718$411$308$140,477
71$718$410$309$140,168
72$718$409$310$139,858
73$718$408$311$139,548
74$718$407$311$139,236
75$718$406$312$138,924
76$718$405$313$138,611
77$718$404$314$138,297
78$718$403$315$137,981
79$718$402$316$137,665
80$718$402$317$137,348
81$718$401$318$137,031
82$718$400$319$136,712
83$718$399$320$136,392
84$718$398$321$136,071
85$718$397$322$135,750
86$718$396$323$135,427
87$718$395$323$135,104
88$718$394$324$134,779
89$718$393$325$134,454
90$718$392$326$134,128
91$718$391$327$133,800
92$718$390$328$133,472
93$718$389$329$133,143
94$718$388$330$132,813
95$718$387$331$132,482
96$718$386$332$132,150
97$718$385$333$131,817
98$718$384$334$131,483
99$718$383$335$131,148
100$718$383$336$130,812
101$718$382$337$130,475
102$718$381$338$130,137
103$718$380$339$129,798
104$718$379$340$129,458
105$718$378$341$129,117
106$718$377$342$128,775
107$718$376$343$128,432
108$718$375$344$128,089
109$718$374$345$127,744
110$718$373$346$127,398
111$718$372$347$127,051
112$718$371$348$126,703
113$718$370$349$126,354
114$718$369$350$126,004
115$718$368$351$125,653
116$718$366$352$125,301
117$718$365$353$124,948
118$718$364$354$124,594
119$718$363$355$124,239
120$718$362$356$123,883
121$718$361$357$123,526
122$718$360$358$123,168
123$718$359$359$122,808
124$718$358$360$122,448
125$718$357$361$122,087
126$718$356$362$121,724
127$718$355$363$121,361
128$718$354$365$120,996
129$718$353$366$120,631
130$718$352$367$120,264
131$718$351$368$119,897
132$718$350$369$119,528
133$718$349$370$119,158
134$718$348$371$118,787
135$718$346$372$118,415
136$718$345$373$118,042
137$718$344$374$117,668
138$718$343$375$117,292
139$718$342$376$116,916
140$718$341$377$116,539
141$718$340$379$116,160
142$718$339$380$115,780
143$718$338$381$115,400
144$718$337$382$115,018
145$718$335$383$114,635
146$718$334$384$114,251
147$718$333$385$113,865
148$718$332$386$113,479
149$718$331$387$113,092
150$718$330$389$112,703
151$718$329$390$112,313
152$718$328$391$111,922
153$718$326$392$111,530
154$718$325$393$111,137
155$718$324$394$110,743
156$718$323$395$110,347
157$718$322$397$109,951
158$718$321$398$109,553
159$718$320$399$109,154
160$718$318$400$108,754
161$718$317$401$108,353
162$718$316$402$107,950
163$718$315$404$107,546
164$718$314$405$107,142
165$718$312$406$106,736
166$718$311$407$106,329
167$718$310$408$105,920
168$718$309$410$105,511
169$718$308$411$105,100
170$718$307$412$104,688
171$718$305$413$104,275
172$718$304$414$103,861
173$718$303$416$103,445
174$718$302$417$103,028
175$718$300$418$102,610
176$718$299$419$102,191
177$718$298$420$101,771
178$718$297$422$101,349
179$718$296$423$100,926
180$718$294$424$100,502
181$718$293$425$100,077
182$718$292$427$99,650
183$718$291$428$99,222
184$718$289$429$98,793
185$718$288$430$98,363
186$718$287$432$97,931
187$718$286$433$97,498
188$718$284$434$97,064
189$718$283$435$96,629
190$718$282$437$96,192
191$718$281$438$95,754
192$718$279$439$95,315
193$718$278$440$94,875
194$718$277$442$94,433
195$718$275$443$93,990
196$718$274$444$93,546
197$718$273$446$93,100
198$718$272$447$92,653
199$718$270$448$92,205
200$718$269$450$91,755
201$718$268$451$91,304
202$718$266$452$90,852
203$718$265$453$90,399
204$718$264$455$89,944
205$718$262$456$89,488
206$718$261$457$89,030
207$718$260$459$88,572
208$718$258$460$88,111
209$718$257$461$87,650
210$718$256$463$87,187
211$718$254$464$86,723
212$718$253$466$86,257
213$718$252$467$85,791
214$718$250$468$85,322
215$718$249$470$84,853
216$718$247$471$84,382
217$718$246$472$83,909
218$718$245$474$83,436
219$718$243$475$82,961
220$718$242$477$82,484
221$718$241$478$82,006
222$718$239$479$81,527
223$718$238$481$81,046
224$718$236$482$80,564
225$718$235$483$80,081
226$718$234$485$79,596
227$718$232$486$79,109
228$718$231$488$78,622
229$718$229$489$78,132
230$718$228$491$77,642
231$718$226$492$77,150
232$718$225$493$76,656
233$718$224$495$76,162
234$718$222$496$75,665
235$718$221$498$75,167
236$718$219$499$74,668
237$718$218$501$74,167
238$718$216$502$73,665
239$718$215$504$73,162
240$718$213$505$72,657
241$718$212$507$72,150
242$718$210$508$71,642
243$718$209$510$71,133
244$718$207$511$70,622
245$718$206$512$70,109
246$718$204$514$69,595
247$718$203$515$69,080
248$718$201$517$68,563
249$718$200$518$68,044
250$718$198$520$67,524
251$718$197$522$67,003
252$718$195$523$66,479
253$718$194$525$65,955
254$718$192$526$65,429
255$718$191$528$64,901
256$718$189$529$64,372
257$718$188$531$63,841
258$718$186$532$63,309
259$718$185$534$62,775
260$718$183$535$62,240
261$718$182$537$61,703
262$718$180$539$61,164
263$718$178$540$60,624
264$718$177$542$60,083
265$718$175$543$59,539
266$718$174$545$58,995
267$718$172$546$58,448
268$718$170$548$57,900
269$718$169$550$57,351
270$718$167$551$56,799
271$718$166$553$56,247
272$718$164$554$55,692
273$718$162$556$55,136
274$718$161$558$54,578
275$718$159$559$54,019
276$718$158$561$53,458
277$718$156$563$52,896
278$718$154$564$52,332
279$718$153$566$51,766
280$718$151$567$51,198
281$718$149$569$50,629
282$718$148$571$50,058
283$718$146$572$49,486
284$718$144$574$48,912
285$718$143$576$48,336
286$718$141$577$47,758
287$718$139$579$47,179
288$718$138$581$46,598
289$718$136$583$46,016
290$718$134$584$45,432
291$718$133$586$44,846
292$718$131$588$44,258
293$718$129$589$43,668
294$718$127$591$43,077
295$718$126$593$42,485
296$718$124$595$41,890
297$718$122$596$41,294
298$718$120$598$40,696
299$718$119$600$40,096
300$718$117$602$39,494
301$718$115$603$38,891
302$718$113$605$38,286
303$718$112$607$37,679
304$718$110$609$37,071
305$718$108$610$36,460
306$718$106$612$35,848
307$718$105$614$35,234
308$718$103$616$34,619
309$718$101$618$34,001
310$718$99$619$33,382
311$718$97$621$32,761
312$718$96$623$32,138
313$718$94$625$31,513
314$718$92$627$30,886
315$718$90$628$30,258
316$718$88$630$29,628
317$718$86$632$28,996
318$718$85$634$28,362
319$718$83$636$27,726
320$718$81$638$27,089
321$718$79$639$26,449
322$718$77$641$25,808
323$718$75$643$25,165
324$718$73$645$24,519
325$718$72$647$23,873
326$718$70$649$23,224
327$718$68$651$22,573
328$718$66$653$21,920
329$718$64$655$21,266
330$718$62$656$20,609
331$718$60$658$19,951
332$718$58$660$19,291
333$718$56$662$18,628
334$718$54$664$17,964
335$718$52$666$17,298
336$718$50$668$16,630
337$718$49$670$15,960
338$718$47$672$15,288
339$718$45$674$14,614
340$718$43$676$13,939
341$718$41$678$13,261
342$718$39$680$12,581
343$718$37$682$11,899
344$718$35$684$11,215
345$718$33$686$10,530
346$718$31$688$9,842
347$718$29$690$9,152
348$718$27$692$8,460
349$718$25$694$7,767
350$718$23$696$7,071
351$718$21$698$6,373
352$718$19$700$5,673
353$718$17$702$4,971
354$718$14$704$4,267
355$718$12$706$3,561
356$718$10$708$2,853
357$718$8$710$2,143
358$718$6$712$1,431
359$718$4$714$716
360$718$2$716$0

What is House Hacking?

House hacking is where you purchase a single- or multi-family property and then live in the property while renting out a room or unit to help cover your mortgage expenses. The practice of house hacking is also known as being an owner-occupied landlord or live-in landlord. The key advantage to house hacking is that your tenants effectively help cover your mortgage payment which can reduce or even eliminate your housing expense. Since housing is the biggest monthly expense for most people, house hacking can help you to dial up your savings rate and reach financial independence sooner.

Advantages of House Hacking

  • Being an owner occupant allows you to get the best financing terms. Generally, being an owner occupant allows you to get a lower interest rate than purchasing a property for investment purposes. If you choose to move out at some point and keep your property as a long-term rental, you can keep the owner-occupied loan in place.
  • Smaller down payments are possible. Again, since you are purchasing the property with an owner-occupied loan, you are able to make a down payment as low as 0 to 5% the purchase price by using a VA loan or FHA loan. Loans for an investment property typically require a down payment of 20 to 25%.
  • You likely only have to live there for one year. In general, the requirement for getting an owner-occupied loan is that you maintain occupancy for at least one year. This depends on the terms of your loan, so you should read the fine print before assuming the occupancy requirement. If you were to purchase a property with an owner-occupied loan and then did not live in the property for the first year, you would be committing mortgage fraud, which is a serious offense that can lead to fines and even prison time.

House Hacking approaches

There is no one specific recipe for house hacking - it can be done successfully with several different types of properties. There are a wide variety of approaches that you can take depending on what kind of down payment you can afford and your comfort level with living with housemates. From a high level we can divide the strategies into two groups: Single-Family and Multi-Family. The 2x2 diagram below shows how the different strategies compare with respect to privacy and profitability.

Single Family Home

Compared to a multi-family property, a single-family home is generally going to have a lower purchase price which means you can start house-hacking with a lower down-payment. Single family homes are more widespread than multi-family properties, which can be quite rare to come on the market depending on your city. A common approach to house hacking with a single-family home is to rent out one or more of your extra bedrooms to housemates and share the common spaces. The drawback to this is that you sacrifice some of your privacy as you are effectively "living with roommates." Make sure to check you local zoning laws as many cities limit the number of non-related people that can live in the same household. Strategies include:

  • Long-term rent by the room. With this approach, you find long-term tenants for individual rooms in your house. By having your tenants sign a lease you can limit how often you need to fill vacant rooms.
  • Short-term rent by the room (Airbnb). While similar to the approach above, renting out your rooms on a short-term basis offers the potential to make a bit more income and also the flexibility to have your place to yourself when you want. The downside is that being an Airbnb host requires time and effort and you would have more strangers coming and going.
In high cost of living areas like the SF Bay Area, Seattle, and Denver, house-hacking a single family home is popular because there is a large market of young people looking to rent by the room, and multi-family properties can be prohibitively expense.

Multi-Family

House-hacking with a multi-family property offers its own set of pros and cons. Low down payment loans like VA or FHA loans can be used to house-hack multi-family properties like duplexes, triplexes, fourplexes, or single-family homes with Accessory Dwelling Units (ADU). The drawbacks to the multi-family approach is that multi-family properties are more expensive (requiring a higher down-payment) and often harder to find on the market. On the plus side, multi-family house-hacking offers more privacy to you as the landlord and also offers the potential for more cashflow if you choose to move out and rent out all the units in the future. Strategies include:

  • Long-term rent the other unit. The simplest multi-family approach is to live in one unit and rent out the other(s) to tenants on a long-term lease. Having long term leases gives you some predictability about vacancies, and is fairly hands-off aside from maintenance.
  • Short-term rent the other unit (Airbnb). Since "entire places" command a premium on Airbnb, renting your other unit on a short-term basis can allow you to earn more each month than a long-term rental. The drawback is the time and effort required to be an Airbnb host.
  • Rent the other unit and rent a room in your unit. The ultimate frugal house-hack is to both rent out the other unit (either short- or long-term) while at the same time renting out one of the rooms in your unit (also either short- or long-term). This may be the most profitable house-hacking strategy because it combines the rent-by-the-room model with the multi-family approach.

Overall House Hacking strategy

From a high-level, many real estate investors find house-hacking attractive because it allows them to accumulate a portfolio of rental properties with relatively low money down because of the benefits of owner-occupied loans that I previously mentioned. The common overall strategy for building wealth through house hacking is as follows:

  1. Buy your first house hack (HH#1).
  2. Live in HH#1 for at least one year while using the rent savings to help save up cash for another down payment.
  3. Buy your second house hack using this down payment (HH#2).
  4. Move out of HH#1 and place tenants to fully rent it out. With it fully rented, ideally it is providing a positive net cash flow.
  5. Live in HH#2 for at least one year. Use the rent savings from HH#2 and positive net cash flow from HH#1 to save up cash for another down payment.
  6. Repeat.

As you can see, this house-hacking strategy creates a snowball effect on your net worth where with each house hack you do, you create more positive cash flow. Even if you only want to do one house-hack and then get your own place, once you move out you can place tenants who will be helping to pay off your mortgage while your property also likely appreciates in value.

Craig Curelop is a golden example of this strategy executed to perfection. He started house-hacking in Denver, Colorado in 2017 and in just a few years, he was able to reach financial independence from the cash flow that his house hacks provided combined with the rapidly-appreciating Denver real estate market. To learn more about Craig's strategy you can check out his book: The House Hacking Strategy: How to Use Your Home to Achieve Financial Freedom.

Drawbacks to House Hacking

While house hacking can be an amazing strategy with the right planning, it is not without its drawbacks:

  • House hacking involves some sacrifice depending on which stage of life you are in. If you want to house-hack a single-family home, then you need to be comfortable with living with roommates. House-hacking a multi-family gives you more personal space as you can have the whole unit to yourself, but it still may be a step down in standard of living if you have a spouse and children and are used to living in a nice single family home.
  • House hacking means becoming a landlord, and this brings with it several responsibilities. You have to stay on top of maintenance of your property, carefully vet tenants, and replace tenants when they move out.
  • House-hacking does have some financial risks. While they are impossible to predict, black swan events like the Covid-19 pandemic can impact the ability of your tenants to pay rent, which could leave you on the hook for your mortgage payments with no rental income. Additionally, purchasing real estate with a low down payment means investing with high amounts of leverage. While leverage is great when prices are appreciating, it could also leave you owing more than the property is worth if your local market has a downturn.