Slash Your Mortgage Payments with a Smart House Hack

Answer

House hacking lets you turn your primary residence into an income‑producing asset, reducing or even eliminating your monthly housing expense. By renting out part or all of your home, you can cover mortgage costs while building equity.

Here’s what you need to know about house hacking:

• What counts as a house hack?
  • Renting spare bedrooms or finished basements to roommates
  • Buying a duplex, triplex or four‑plex and living in one unit
  • Converting an ADU (accessory dwelling unit) or garage apartment
• Financing your hack.
  • FHA loans allow up to four units with just 3.5 % down (owner‑occupied requirement applies)
  • Conventional mortgages typically require 15 – 25 % down for multi‑unit properties
  • VA loans and other programs can also support multi‑unit purchases with favorable terms
• Income and tax benefits.
  • Tenant rent can cover 50 – 100 % of your mortgage and utility bills
  • Report rental income on Schedule E and deduct a pro‑rata share of mortgage interest, property taxes, insurance and maintenance (see IRS Pub 527)
  • Short‑term rentals under 15 days may qualify for the “14‑day rule,” exempting that income from taxation
• Key considerations.
  • Zoning, HOA and local regulations on ADUs or occupancy limits
  • Homeowner’s insurance—add a landlord or dwelling fire endorsement to cover renters
  • Lease agreements, security deposits and tenant screening to protect your investment
  • Shared‑space etiquette: parking, noise rules and common‑area access

House hacking offers a powerful path to homeownership affordability, letting you build wealth faster while living in the property. Before you proceed, it’s advisable to consult a licensed real estate agent or attorney familiar with local rules and financing options to ensure your strategy aligns with zoning, mortgage and tax requirements.