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House Hacking a Duplex: The Basics

Live in one unit, rent the other: how it works and what to check.

House hacking means buying a small multi-unit property (2–4 units), living in one unit, and renting the others. The rent helps cover your mortgage while you build equity.

Why a duplex?

• Owner-occupied financing. Because you live there, you may qualify for primary-residence loan programs, which typically have lower down payments than investment-property loans (for example, FHA allows as little as 3.5% down on 1–4 unit owner-occupied homes for eligible borrowers).
• Rental income can help you qualify. Many lenders count a portion of the other unit's projected rent (often 75%) toward your income.
• Landlord practice on a small scale. You learn screening, leases, and maintenance with one tenant.

Run the numbers

Start with the full monthly cost: principal, interest, taxes, insurance (PITI), plus mortgage insurance, utilities you pay, maintenance (budget ~5–10% of rent), vacancy (~5–8%), and capital repairs. Subtract realistic rent for the other unit. What's left is your real housing cost.

Hypothetical example: PITI of $2,100, reserves of $300, and $1,300 rent from the other unit means you live there for roughly $1,100/month — before any surprises.

Checklist before you offer

• Get pre-approved and ask the lender how they treat rental income
• Pull comparable rents, not the seller's numbers
• Inspect both units, plus roof, HVAC, and plumbing
• Check local zoning, rental rules, and the occupancy requirement (usually 12 months)
• Keep cash reserves for repairs and vacancy