Strategy and Basics
- What is house hacking? Owning a property as a primary residence and renting portions to offset housing costs.
- What property types work? Duplexes, triplexes, fourplexes, SFH with rented rooms, ADUs, basement apartments.
- What markets work best? Midwest and South generally offer better rent-to-price ratios than coastal markets.
- How much can I save? $500–$3,000/month depending on property type, market, and rental income generated.
- How long does it take to set up? Allow 3–6 months from initial search to having tenants placed in a house hack.
Financing Questions
Quick answers to house hacking financing questions
| Question | Short Answer |
|---|---|
| Minimum down payment? | 3.5% FHA, 5% conventional, 0% VA (veterans) |
| Credit score required? | 580+ for FHA, 620+ conventional |
| Can rental income help qualify? | Yes — 75% of market rent counts as income |
| Can I have multiple FHA loans? | Generally one at a time unless moving for job or outgrowing |
| Is there an income limit? | No — FHA has no income cap |
Tenant and Management Questions
Managing tenants while living on-site is the primary lifestyle consideration for house hackers. Common questions include:
- How do I find tenants? MLS, Zillow Rental Manager, Facebook Marketplace, word-of-mouth, Craigslist
- How do I screen tenants? Credit check, background check, employment verification, landlord references
- What lease should I use? State-specific lease templates from your state’s realtor association or LegalZoom
- What’s a security deposit? Typically 1–2 months rent; varies by state maximum
- What if they don’t pay? Follow your state’s eviction process; maintain 2–3 month reserve to cover the gap
Thorough screening prevents 90% of tenant problems. Verify income (2.5–3× rent), check credit (650+ preferred), call previous landlords, and run a background check. The 30 minutes spent on proper screening saves months of potential headaches.
Tax Questions
Key tax facts for house hackers:
- Report all rental income on Schedule E
- Deduct proportional expenses: mortgage interest, taxes, insurance, maintenance
- Depreciate rental portion over 27.5 years
- The $25,000 passive loss allowance may let you deduct rental losses against regular income
- Consult a CPA — the combination of personal and rental use creates complexity worth professional guidance
Exit Strategy Questions
What happens when you’re done house hacking? Options: (1) Continue renting the units as investment property — full conversion; (2) Move the tenants out, sell as primary residence and capture $250,000/$500,000 exclusion on appreciation (personal portion); (3) Do a 1031 exchange to defer taxes; (4) Live there indefinitely with tenants continuing to fund the mortgage.
Run Your House Hacking Numbers Now
Calculate effective housing cost, cash flow, and 10-year returns for any property.