House Hacking ROI Calculator
Calculate house hacking returns: live in one unit of a multifamily, rent out the rest. FHA 3.5% down owner-occupant strategy.
House Hacking Complete Guide
Why House Hacking Is the Best Entry to Real Estate
House hacking = buy multifamily (2-4 units) as owner-occupant, live in one, rent the others. Best for first-time real estate investors because: (1) Owner-occupant financing — 3.5% down FHA, 5% conventional, 0% VA. Investment property financing requires 20-25% down. On $550k purchase: $19k owner-occupant vs $110k investor. (2) Tenants pay your mortgage — often eliminates your housing cost or generates positive cash flow. (3) Saves cash vs renting — typical house hackers save $1,000-2,500/month vs
FHA Multifamily Rules
FHA loans allow purchase of 1-4 unit properties with just 3.5% down IF you live in one unit as your primary residence for at least 12 months. Self-sufficiency test for 3-4 unit FHA: 75% of expected rent must cover the mortgage payment (P&I, taxes, insurance, MIP). This restricts deals — often the math only works on duplexes. New 2024 FHA rule: 'small-dollar mortgage' product allows higher debt-to-income for multifamily purchases under $250k. FHA mortgage insurance: 1.75% upfront + 0.55% annual =
The Numbers That Make House Hacks Work
Target metrics for a good house hack: After moving in, your monthly housing cost (PITI - other unit rents) should be 50% or less than what you'd pay renting equivalent space. Cash-flow positive even with you living there (rare but happens on triplexes/fourplexes). After moving out in year 2-3, the property should cash flow $200-500+/month as a pure investment. Strong markets for house hacking: areas with multifamily inventory (older Midwest cities, smaller East Coast cities, parts of Florida). B
The Repeat Strategy
Aggressive wealth-builders execute a new house hack annually — moving into a new owner-occupied property and converting the previous one to pure rental. FHA allows multiple FHA loans if relocating for legitimate reasons (job, family size). Conventional allows up to 10 financed properties (Fannie/Freddie limit). Over 10 years, a disciplined house hacker can accumulate 5-10 small multifamily properties, each cash-flowing $200-500/month. At $300/month average × 8 properties = $2,400/month passive i
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