House Hacking ROI Calculator
Calculate if buying a multi-family property, living in one unit, and renting out the others will allow you to live completely rent-free.
The Property
The Rental Income
Your tenants are heavily subsidizing your mortgage. You only pay $55 per month for your unit.
Even if you break even ($0 cash flow), your tenants are paying down your loan principal every month, building your net worth automatically.
What is House Hacking?
"House Hacking" is a real estate investment strategy where you buy a multi-family property (usually a duplex, triplex, or 4-plex), live in one of the units as your primary residence, and rent out the other units to tenants.
The goal is for the rent collected from the tenants to completely cover your mortgage, property taxes, insurance, and maintenance, allowing you to live for free.
The 3.5% FHA Loan Exploit
Typically, buying an investment property requires a massive 20% to 25% down payment. However, because you are living in one of the units, the government considers it an "Owner-Occupied Primary Residence."
This allows you to use an FHA loan to buy the entire building with just a 3.5% down payment. You can buy a $500,000 four-plex with just $17,500 down! (Note: FHA loans do carry Private Mortgage Insurance (PMI) which is not factored into the basic calculator above).
Cash Flow vs. "Effective Rent"
In highly competitive markets, your tenants might not cover 100% of your mortgage. For example, your mortgage might be $3,000, and your tenants only pay $2,400.
While you have a negative cash flow of -$600, this is actually a massive win! Your "Effective Rent" to live in a house you own is only $600/month. Plus, your tenants are paying down the principal balance on your loan every month, building your net worth.
Frequently Asked Questions
What is the House Hacking Profitability Calculator?
The House Hacking Profitability Calculator is a free online tool designed to help you calculate if living in a multi-family property will let you live rent-free.
How much does the House Hacking Profitability Calculator cost?
Our House Hacking Profitability Calculator is 100% free to use. We do not require any signups, subscriptions, or credit cards.
Is my data safe when using this tool?
Yes. All calculations are performed locally in your web browser. We do not store or save your financial data or inputs on our servers.