House hacking is the fastest realistic way for a regular person to stop paying rent and start building equity. The idea is simple: buy a small multi-unit property — a duplex, triplex, or even a single-family home with a detached accessory dwelling unit — live in one unit, and rent out the other(s). The tenants' rent covers most (or all) of your mortgage, so you live for nearly free while someone else pays down your loan.
This calculator does the math. It turns your total housing cost — principal, interest, property tax, insurance, and HOA — into one number, then stacks the market rent from every unit against it. The result is your true monthly cash flow: positive when the property pays you, negative when you have to chip in.
How to Use
- Enter the Home Price — what you would actually pay the seller for the whole building.
- Set your Down Payment as a percentage. Owner-occupied multi-unit loans often allow 3–5% down, but putting 20% removes private mortgage insurance and lowers your monthly carrying cost.
- Type your Interest Rate (APR). If you have not locked a rate, test ±0.5% to stress-test the deal.
- Choose the Loan Term — 30 years is standard; the longer term keeps the monthly payment low, which is what makes house hacking work.
- Add Property Tax, Home Insurance, and HOA Fee in the advanced section. These are easy to forget and they are exactly what pushes a "great on paper" duplex into a cash-burning deal.
- Enter the Occupied Unit Rent Value — what a tenant would pay for the unit you live in. This is the rent you are effectively saving.
- Enter the Rented Unit Rent — the check you collect each month from your tenant(s).
- Set a Vacancy & Repair Reserve (5–10% is typical). Leaving this at zero flatters the numbers and ignores the roof that will eventually leak.
The result card shows your total PITI, the gross and net rent, your vacancy reserve, and the headline figure: monthly cash flow. A rent coverage ratio at or above 1.0 means the rent covers the mortgage; below 1.0 means you subsidize the home out of your paycheck.
How the Math Works
Your monthly mortgage uses the standard amortization formula:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
where P is the loan amount (home price minus down payment), r is the monthly interest rate (APR ÷ 12), and n is the number of monthly payments (years × 12). Add property tax, insurance, and HOA to get your full monthly carrying cost — the PITI figure.
Then the house-hacking equation is deliberately simple:
Monthly Cash Flow = (Unit A Rent + Unit B Rent) × (1 − Reserve%) − PITI
The occupied-unit rent counts because living there is a real benefit you would otherwise pay for. If you would pay $1,500 to rent an equivalent apartment, occupying that unit saves you $1,500 a month. Add the $1,500 you collect from the tenant in the other unit, and the property generates $3,000 of housing value. Against a $2,400 mortgage, the home pays for itself and leaves roughly +$600 a month — no rent check, no landlord, and the loan balance falling every month.
The Classic Duplex Example
A common first house hack looks like this: a $400,000 duplex, 20% down ($80,000), a 30-year loan, and two units that each rent for $1,500. The loan is $320,000. At a rate around 8.25%, principal and interest is about $2,400/month. Add property tax and insurance and the full PITI lands near $2,900. Total rent from both units is $3,000, so even after a small vacancy reserve the property throws off a small positive cash flow — and you live in half of it for free.
Compare that to renting the same duplex: if you had rented one unit for $1,500, you would pay $18,000 a year to a landlord with nothing to show for it. As the owner, the same $1,500 of "saved rent" plus the tenant's check pays your mortgage, builds equity, and captures appreciation on the whole building.
Examples
Example 1 — The break-even duplex. A buyer puts 20% down on a $400,000 duplex at 7.0% for 30 years. Loan is $320,000; P&I is about $2,129; tax and insurance add roughly $500; total PITI near $2,629. Both units rent for $1,500 each, so gross rent is $3,000. After a 5% vacancy reserve ($150), net rent is $2,850 and monthly cash flow is about +$221. The tenants and your own saved rent cover the mortgage with a small surplus.
Example 2 — Zero-down stress, no vacancy. A buyer uses a 5% down owner-occupant loan and leaves the vacancy reserve at 0%. On a $400,000 duplex at 8.25%, PITI is about $2,904. Rent is $3,000, so cash flow is roughly +$96/month — razor-thin. One vacant month, a broken water heater, or a 0.25% rate hike flips this negative, which is why a real reserve matters.
Example 3 — The million-dollar triplex. On a $1,200,000 triplex with 25% down, PITI is about $7,388/month while two rented units plus your occupied unit generate $3,600 of rent. The coverage ratio is under 0.5, so cash flow is roughly −$3,968/month. This is the trap: expensive properties rarely cash-flow, even when they look impressive on a listing. House hacking works best in modest, cash-flowing markets, not trophy buildings.
FAQ
What is house hacking?
House hacking means buying a multi-unit property (or a home with an accessory unit), living in one unit, and renting out the rest. The rental income covers most or all of the mortgage, so you live for little or no rent while tenants pay down your loan and you build equity.
How much money do I need to start house hacking?
Owner-occupied multi-unit loans commonly allow 3–5% down on 2–4 unit buildings. On a $400,000 duplex that is roughly $12,000–$20,000 down plus closing costs, far less than a typical investment-property down payment of 15–25%. Putting 20% down avoids PMI and improves monthly cash flow.
What is a good cash flow for a house hack?
Aim for a rent coverage ratio at or above 1.0, meaning gross rent covers the full PITI. Ideally the property is modestly positive each month after a 5–10% vacancy and repair reserve. The real payoff is the rent you save on your own unit plus forced equity paydown, not a big monthly check.
Do tenants really cover my whole mortgage?
Often close. In a classic duplex, your own unit's rent value plus the tenant's check frequently equals or exceeds the PITI, which is the whole point. It depends heavily on local rent-to-price ratios; in high-cost cities rent rarely covers the mortgage, while in Midwest and Sun Belt markets it regularly does.
Can I house hack a single-family home?
Yes. You can rent out a spare bedroom, basement, or a garage-converted studio, or build an accessory dwelling unit (ADU). The math is the same: total rent collected plus the bedroom rent you save, minus your PITI and reserves.
What expenses am I forgetting?
The biggest hidden costs are vacancy, repairs, property tax increases, and landlord insurance. Budget a 5–10% reserve from rent, and remember that as the owner you pay for every broken appliance and leaky roof — costs a normal renter never sees.
Disclaimer
This house hacking calculator is provided for informational purposes only and does not constitute financial, lending, real estate, or tax advice. Estimates are based on the inputs you enter and the standard amortization and cash-flow formulas; actual results vary by lender, loan program, credit profile, location, vacancy, and market rents. Always confirm financing terms with a licensed mortgage lender and run the actual numbers on any specific property before buying.