Property Type
Choose a property preset
Purchase Details
Property price and financing terms
$40,000
$12,000
What you'd pay renting elsewhere
Unit Configuration
Configure rental units and rates
Monthly Expenses
Property taxes, insurance, and other costs
$400/month
$167/month
If down payment < 20%
Your share of utilities
Operating Expense Assumptions
Appreciation Assumptions
Monthly Cash Flow
-$2,037
Negative
Net Housing Cost
$2,037
vs $2,000 renting
Cash on Cash Return
-47%
On $52,000 invested
5-Year Wealth Built
-$49,836
-47.1% annualized
Monthly Cash Flow Analysis
Income vs expenses breakdown
Income
Expenses
Monthly Expense Breakdown
5-Year Equity & Cash Flow Projection
5-Year Projection
Property value and equity growth
| Year | Property Value | Loan Balance | Equity | Annual Cash Flow | Cumulative Cash Flow |
|---|---|---|---|---|---|
| 1 | $412,000 | $356,343 | $55,657 | -$23,928 | -$23,928 |
| 2 | $424,360 | $352,422 | $71,938 | -$24,230 | -$48,159 |
| 3 | $437,091 | $348,217 | $88,874 | -$24,534 | -$72,692 |
| 4 | $450,204 | $343,708 | $106,495 | -$24,838 | -$97,530 |
| 5 | $463,710 | $338,874 | $124,836 | -$25,142 | -$122,672 |
Investment Metrics
Key financial indicators
House Hack Summary
Quick Answer: What is House Hacking?
House hacking is a real estate investment strategy where you live in one unit of a multi-family property while renting out other units. The rental income helps cover or eliminate your mortgage payment. For example, buying a duplex for $400,000 with 3.5% FHA down payment ($14,000) and renting one unit for $1,500/month could offset most of your $2,200 monthly mortgage. Our free calculator analyzes cash flow, cap rate, and cash-on-cash return.
Key Facts
- House hacking lets you live rent-free or with reduced housing costs
- FHA loans allow 3.5% down on 1-4 unit properties if owner-occupied
- Properties with 1-4 units qualify for residential (not commercial) financing
- Cash-on-cash return measures annual cash flow relative to cash invested
- DSCR (Debt Service Coverage Ratio) above 1.0 means positive cash flow
- The 1% rule: monthly rent should be at least 1% of purchase price
- You must live in the property for 12 months with FHA financing
What if you increased rental income?
See how increasing rents impacts your cash flow
Personalized Insights
2 insights based on your inputs
Negative Cash Flow
You'll need to cover $2,037/month, but you're building equity.
59.5% Mortgage Covered
Your tenants are paying more than half your housing costs.
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Frequently Asked Questions
What is house hacking?
House hacking is a real estate strategy where you live in one unit of a multi-unit property (like a duplex) while renting out the other units. The rental income helps cover your mortgage, potentially allowing you to live for free or at significantly reduced cost while building equity.
What property types work for house hacking?
Common house hacking properties include: duplexes (2 units), triplexes (3 units), fourplexes (4 units), single-family homes with ADUs (accessory dwelling units), or even renting out rooms in a single-family home. Properties with 1-4 units can still qualify for residential financing.
How much can I reduce my housing cost?
Many successful house hackers reduce their net housing cost by 50-100%. Some even generate positive cash flow, effectively getting paid to live in their home. Results depend on purchase price, rental rates, and expenses in your market.
What is cash on cash return?
Cash on cash return measures the annual pre-tax cash flow relative to your total cash invested (down payment + closing costs). For example, if you invest $50,000 and generate $5,000 in annual cash flow, your cash on cash return is 10%.
What is a good DSCR for house hacking?
DSCR (Debt Service Coverage Ratio) measures if rental income covers debt payments. A DSCR of 1.0 means break-even, above 1.0 is positive cash flow. For house hacking, DSCR is often lower since you're not renting all units, but you gain through reduced personal housing costs.
Can I use FHA financing for house hacking?
Yes! FHA loans allow 3.5% down on properties with 1-4 units if you live in one unit for at least a year. This makes house hacking accessible with relatively small down payments. VA loans (0% down) and conventional loans also work for owner-occupied multi-family.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).