House Hack
Live in part of a property, rent the rest — start building wealth from your first home.
House hacking is the simplest, most accessible entry into real estate investing: buy a 2-4 unit property (or a single-family home with rentable space), live in one unit, rent the others. Because you're owner-occupying, you qualify for low-down-payment residential loans (FHA at 3.5%, conventional at 5%) — far better terms than investment-property financing. Your tenants' rent often covers most or all of your mortgage, meaning your true housing cost is dramatically lower than a standard home purchase.
- 1Buy a 2-4 unit
Use owner-occupied financing (FHA 3.5% down, or conventional 5% down). 2-4 units qualify; 5+ require commercial financing.
- 2Move in
FHA and conventional both require you to occupy for at least 12 months.
- 3Rent the other unit(s)
Lease the remaining units to qualified tenants. Their rent covers a significant share of your mortgage.
- 4After 12 months
Move out, rent your unit too, and the property becomes a fully-rented investment. Repeat: buy the next house hack with a new owner-occupied loan.
Your share of the mortgage + utilities − tenant rent received. Often a fraction of what you'd pay renting an equivalent unit.
How much of the mortgage your tenants pay. 60-100%+ is achievable in the right market.
Once you leave, the property is fully rented — that's when it pays you instead of you paying it.
Principal paydown plus appreciation. House hacking compounds quickly because of the high leverage from low down payment.
- First-time investor or first-time homebuyer.
- You're comfortable living near tenants.
- Your market has 2-4 unit inventory at price points that work with FHA/conventional limits.
- You're playing a long game — house hacking compounds over many cycles.
- Living next to tenants. Boundaries matter. Set them upfront.
- FHA loan limits — they cap the property price you can buy. Check your county's limit.
- Mortgage insurance (PMI/MIP) on low-down-payment loans — adds to your monthly cost.
- Owner-occupancy requirement is enforced. Don't buy and immediately rent out your unit; that's mortgage fraud.