House Hack Calculator
Live in one unit, rent out the rest. See your real housing cost — and your cash flow when you move out.
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Assumes you rent your unit at market and keep PMI. Refinancing out of FHA can drop PMI for ~$100-200 more cash flow.
Sam's Take
House hacking is how I started. The math feels almost too good — your effective housing cost can drop to a third of a comparable rental — but the catch is you're a live-in landlord. Tenants will hear you. You'll hear them. Pick the unit with the most insulation between you and them. Spend the extra $5K on a better property over a worse one; you're going to live there for at least a year per FHA owner-occupancy rules.
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What house hacking actually is
House hacking means you buy a small multifamily property — 2, 3, or 4 units — live in one of the units yourself, and rent out the others. The rent from the other units offsets your mortgage. If the numbers work, it can fully cover your housing cost and you live for free. Some house hackers actually generate cash flow while living in the building.
It's the cheapest way into real estate investing in America, and most people don't know it exists because it sits in a strange spot between "buying a home" and "buying an investment."
Why it works: the FHA loophole
A regular investment property loan requires 20-25% down. On a $550,000 4-unit, that's $110-140K of cash you have to come up with. Most people don't have that.
But FHA, the loan program designed for first-time owner-occupants, allows 3.5% down on properties up to 4 units — as long as you actually live in one of them. So that same $550,000 4-unit you'd have needed $130K+ to buy as an investment, you can buy with about $20K down as a house hack. The loan is looking at you as a homeowner, not an investor.
FHA requires you to live in one of the units for at least 12 months. After that 12 months, you're free to move out and convert your unit to a rental. The loan stays in place. You're now an owner of a cash-flowing 4-unit on financing terms a real investor could never have gotten.
What the calculator shows you
Two numbers, both important. First: your effective housing cost during the year you live there — mortgage and carrying costs, minus the rent the other units bring in. For most house hackers this lands somewhere between "free housing" and a few hundred dollars a month, dramatically less than renting an apartment. Second: your monthly cash flow after you move out and rent your unit at market rate. That's the long-term position you're building.
What people don't tell you about house hacking
- You're a live-in landlord. Tenants knock on your door at 11pm when their toilet clogs. You hear them. You see who they bring home. It's a different relationship than rental property at arm's length, and it's not for everyone.
- FHA requires 12 months of actual occupancy. If you move out earlier and the lender finds out (and they sometimes audit), they can call the loan due. Don't lie on the application — just plan to live there a full year.
- FHA's MIP doesn't drop when you have equity. If you put 3.5% down, the mortgage insurance premium stays on the loan for the life of the loan. The way out is to refinance into a conventional loan once you have 20% equity, which usually means year 4-7. Budget for that refinance — it's part of the strategy, not optional.
- FHA appraisals are picky. The appraiser is checking that the property is safe, sound, and sanitary. Peeling paint, missing handrails, bad roofs can all hold up the loan and require seller repairs before closing. Rough fixers usually don't survive an FHA appraisal even if the price is right.