House Hacking.

In plain English

House hacking is buying a home, living in part of it, and renting out the other part so the rental income offsets or even covers your housing costs. Common versions include buying a duplex or triplex and living in one unit, or renting out spare bedrooms in a single-family home. Because you live in the property, you may qualify for an owner-occupied mortgage, which often allows a smaller down payment than a pure investment loan. The tradeoff is that you become a landlord while also living on site.

01Why it matters

Cutting or erasing your housing payment is one of the fastest ways to free up money to save or invest, and over decades that redirected cash flow can be worth a great deal.

02The math, step by step

You buy a duplex for 350,000 dollars and live in one unit. The other unit rents for 1,500 dollars a month, which covers a large chunk of your roughly 2,400 dollar monthly payment, leaving you paying about 900 dollars out of pocket for a home you own. You still cover repairs, vacancies, and being on call as a landlord. Owner-occupied loan rules and down payment minimums vary, so confirm with a lender: FHA loans can go as low as 3.5% down, and conventional owner-occupied loans as low as 3% to 5%.

03What this is NOT

04Receipts

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