House Hacking: A Strategic Approach to Real Estate Investment

2 min readPublished Apr 19, 2024

Explore the concept of house hacking, how it can help reduce personal living expenses, and generate income by making smart use of residential property.

Page hero image

House Hacking is a real estate investment strategy that involves purchasing a property with the intention of living in one part while renting out the other parts to generate income. This approach allows property owners to offset or even completely cover their own housing costs with rental income from tenants. It is particularly popular among first-time homeowners and real estate investors looking to reduce personal living expenses or build equity in a property.

How House Hacking Works

House hacking typically involves buying a multi-unit property, such as a duplex, triplex, or a single-family home with potential for room rentals. The owner occupies one unit and rents out the additional space. The rent collected from tenants can help pay the mortgage, property taxes, and other ownership expenses, potentially allowing the owner to live for free or at a significantly reduced cost.

Benefits of House Hacking

  • Reduced Living Expenses: The income generated from tenants can offset a significant portion of the mortgage and other associated property costs.
  • Real Estate Experience: Provides a hands-on way to learn about property management and real estate investing without the need for large-scale investments.
  • Financial Flexibility: Extra income offers financial breathing room to save, invest, or spend on other personal needs.

Considerations for Successful House Hacking

  • Choosing the Right Property: Location, price, and potential rental income are crucial factors to consider when selecting a property for house hacking.
  • Understanding Tenant Laws: Knowledge of local landlord-tenant laws is essential to manage the property effectively and legally.
  • Managing Tenants: Dealing with tenants requires good communication and management skills, especially since the owner and tenants share close proximity.

Practical Example of House Hacking

Imagine purchasing a duplex where each unit rents for $1,200 per month. The owner lives in one unit and rents out the other. If the monthly mortgage payment is $1,800, the rental income from the other unit ($1,200) would cover two-thirds of the mortgage, significantly reducing the owner’s personal housing costs.

Take control of your financial future
Join the thousands already using ProjectionLab to plan for financial independence and retirement.

Disclaimer: The content, tools, and resources on are intended solely for informational and educational purposes and should not be construed as professional financial or investment advice. Our materials are designed to provide general guidance and are based on the input and data provided by users. ProjectionLab makes no guarantee of the accuracy, completeness, or applicability of this content to individual circumstances. Effective financial planning and investment involve comprehensive consideration of a wide array of personal financial factors. The tools and resources available on ProjectionLab are aimed at helping users develop an understanding of their financial trajectory. However, they should not be solely relied upon for creating a complete financial plan. We strongly recommend consulting a financial services professional who can provide personalized advice based on your unique financial situation before making any significant financial decisions. While we endeavor to keep the information on ProjectionLab current and accurate, the content may differ from that found on other financial institutions, service providers, or specific product sites. All content and tools on ProjectionLab are provided without any guarantees or warranties of any kind.