A house hack means buying a multi-unit property (or a property with a rentable room or ADU), living in one unit and renting the rest. The rent from the other units offsets your mortgage and expenses — sometimes covering them entirely.
The number that matters is your effective housing cost: total operating expenses plus the mortgage, minus the rent collected from the units you do not occupy. RentScope computes that as the property’s monthly cash flow. If it is positive, the property pays you to live there; if it is negative, that figure is what it costs you per month to live there.
Formula
Housing cost = Mortgage + Operating expenses − Rent from other units
Model the rent from the units you rent out — not the unit you occupy. Apply a vacancy allowance to that rent, and include the full property taxes, insurance, maintenance and any management or utilities you pay. Owner-occupied loans such as FHA (3.5% down) or conventional low-down-payment programs can stretch your capital, but mortgage insurance adds to the cost.
How to calculate it
- Add up rent from the units you will rent out (leave out your own unit).
- Subtract a vacancy allowance and the property’s operating expenses — taxes, insurance, maintenance, HOA, utilities and any management.
- Subtract the full mortgage payment (principal and interest, plus mortgage insurance if any).
- The result is your effective housing cost. Compare it with what you would pay in rent elsewhere.
Worked example
This example models a four-unit house hack: you live in one unit and rent the other three for a combined $4,200/month, using an FHA loan with 3.5% down.
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FAQ
Is a house hack a good idea?
It can dramatically reduce your housing cost and let you build equity with less capital, but you take on landlord responsibilities and share a property with tenants. Run the numbers with realistic rent and expenses before buying.
What loan can I use for a house hack?
Owner-occupied loans are typical: FHA (3.5% down), conventional (as low as 3–5% down for a primary residence), VA (0% down for eligible buyers), or USDA in eligible areas. Expect mortgage insurance on low-down-payment loans.
Does the calculator include my own unit’s rent?
No. Enter only the rent you will collect from the units you do not occupy. Your own unit produces no rent, which is why the housing-cost figure is lower than a normal rental analysis.
What if the cash flow is negative?
A negative number is your effective monthly housing cost — often still less than renting a comparable home, and you are building equity. Compare it with your current rent before deciding.
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