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House Hacking
Living in one unit of a multifamily property while renting out the other units to cover the mortgage.
Definition
House hacking involves purchasing a property, living in part of it, and renting out the rest to offset or eliminate your housing costs. The classic approach is buying a duplex, triplex, or fourplex with an owner-occupied loan (often FHA with 3.5% down) and renting out the other units. Variations include renting rooms in a single-family home or adding an ADU. House hacking is one of the lowest-barrier entry points into real estate investing because owner-occupied financing offers the best rates and lowest down payments. Many investors use house hacking as their first deal before transitioning to pure investment properties.
Related Terms
Duplex
A residential building with two separate living units, either side-by-side or stacked.
Triplex
A residential building with three separate living units.
Fourplex
A residential building with four separate living units - the largest property still classified as residential.
Creative Financing
Non-traditional methods of financing a real estate purchase, such as seller financing or subject-to deals.
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