What is house hacking?

House hacking is buying a property, living in part of it, and renting out the rest so the rental income offsets your housing payment. The classic version is buying a two-to-four-unit building, living in one unit, and renting the others; renting spare bedrooms in a single-family home is the same idea. Because you live there, you can often use a low-down-payment owner-occupant loan.

Does house hacking cover the mortgage?

Sometimes fully, often partly. It depends on how the rent compares to your payment after a vacancy allowance and operating costs. This calculator shows the percent of your payment the net rent covers: at or above 100 percent the rent covers the whole payment (you may even have positive cash flow), while a partial offset still leaves a real out-of-pocket cost each month.

How do I calculate house hacking cash flow?

Start with the gross rent from the units or rooms you do not live in. Subtract a vacancy allowance (a percent of that rent) and operating costs such as maintenance and any management fee to get net rental income. Subtract that from your total monthly housing payment. A positive result is your out-of-pocket cost; a negative result means the rent more than covers the payment, which is positive cash flow.

What does my result mean?

If the rent covers the full payment, your effective housing cost is zero or negative, so you live for free or better. If it covers most of the payment, you are paying a fraction of what you would alone. A partial offset still cuts your cost meaningfully but leaves an out-of-pocket amount. Remember the figures assume the space stays rented, so keep a reserve for vacant months.

House Hacking Calculator

See how renting out the other unit or rooms offsets your mortgage: net rental income, the percent tenants cover, and your true out-of-pocket housing cost.

X f in

Effective out-of-pocket housing cost

$1,246.25

Net rental income: $1,353.75
Share of payment covered by rent: 52.07%
Where this lands: Rent covers part of the payment

Monthly housing cost breakdown

Item	Amount
Housing payment	$2,600.00
Gross rental income	-$1,500.00
Vacancy allowance	$75.00
Operating and management costs	$71.25
Effective out-of-pocket cost	$1,246.25

Quick answer: With the example inputs this page loads by default, the headline result (Effective out-of-pocket housing cost) comes to $1,246.25. See how renting out the other unit or rooms offsets your mortgage: net rental income, the percent tenants cover, and your true out-of-pocket housing cost. Change any input above and every figure updates instantly in your browser.

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House hacking is living in one part of a property while renting out the rest, so the rent offsets your housing payment. To find your true cost, take the rent from the other units or rooms, subtract a vacancy allowance and operating costs, and subtract that net rental income from your monthly payment. What is left is your effective out-of-pocket housing cost. This tool finds that figure, your net rental income, and the percent of the payment the rent covers.

What this result means

The effective out-of-pocket cost is your housing payment after the net rental income is applied. When the rent covers the full payment the figure is zero or negative, meaning you live for free or even collect positive cash flow. When it covers most of the payment your housing cost is a fraction of what it would be alone, and a partial offset still leaves a real out-of-pocket cost each month. Every figure here depends on the units staying rented: a vacant month means you cover the full payment yourself, which is why the vacancy allowance matters. Rents, vacancy, and repair costs all vary, so treat this as a planning estimate for education, not financial advice or a guarantee of what a unit will rent for.

Assumptions

The housing payment is your full monthly cost for the whole property (principal, interest, taxes, insurance, plus any PMI and HOA dues), the amount you would owe if you rented nothing out.
Gross rental income is the total monthly rent from the units or rooms you do not occupy, at full occupancy. The effective rent is that gross rent minus a vacancy allowance, which is a percent of the gross rent (the share of the year the space sits empty).
Operating costs are a maintenance reserve plus an optional property management fee, each a percent of the rent actually collected (after vacancy), matching the rental-roi convention. Management at 0 percent means you self-manage. Net rental income is the effective rent minus these operating costs.
The effective out-of-pocket housing cost is your housing payment minus the net rental income. It is not floored: when the rent more than covers the payment the figure is negative, which is genuine positive cash flow rather than a cost.
The share of the payment covered by rent is the net rental income divided by the housing payment. It is not clamped, so it can read above 100 percent, and it is shown as not applicable when there is no housing payment (the ratio is undefined).
Vacancy is expressed as a percent of gross rent, and maintenance and management as percents of collected rent. All figures are monthly and in nominal dollars, rounded to the nearest cent, and are held constant (no growth in rent, expenses, or vacancy over time).
Not modeled: the purchase itself (price, down payment, rate, and closing costs, which the mortgage and buyer closing cost calculators cover), income taxes and the depreciation shelter, utilities you may split with tenants, capital expenditures beyond the maintenance reserve, and what happens after you move out and rent your own unit too.
Results depend on the space staying rented. A vacant month means you cover the full payment yourself. This is an estimate for educational purposes only, not financial, legal, or tax advice, and not a guarantee of what a unit will rent for.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

What house hacking means and how it is calculated

House hacking is living in one part of a property and renting out the rest so the rent offsets your housing payment. This calculator answers one question: after realistic costs, how much of your monthly payment does the rent actually cover, and what do you pay out of pocket?

The offset is built in three steps.

1. Effective rent (after vacancy). Vacancy is the share of the year the rented space sits empty, expressed as a percent of gross rent:

effective rent = gross rent x (1 - vacancy percent)

2. Net rental income (after operating costs). Maintenance and management are each a percent of the rent you actually collect (after vacancy), the same convention the rental-roi calculator uses:

net rental income = effective rent x (1 - maintenance percent - management percent)

3. Effective out-of-pocket cost. Subtract the net rental income from your full housing payment:

effective out-of-pocket = housing payment - net rental income

This figure is not floored. If the rent more than covers the payment it goes negative, which is real positive cash flow rather than a cost. The share of the payment the rent covers is:

coverage = net rental income / housing payment x 100

Coverage is not clamped, so it can read above 100 percent, and it is undefined (shown as not applicable) when there is no housing payment.

The vacancy and operating-cost convention

Vacancy is a percent of gross rent (a common long-term-rental planning figure is 5 to 10 percent).
Maintenance and management are percents of collected rent (the rent after vacancy). Management at 0 percent means you self-manage, which is common when you live on-site.

Only costs attributable to the rented portion are modeled here. The purchase itself (price, down payment, rate, closing costs) is out of scope; use the mortgage and buyer closing cost calculators for that, then bring the resulting payment here.

Worked example

Using the defaults: a $2,600 monthly housing payment, $1,500 of gross rent from the other unit, a 5 percent vacancy allowance, a 5 percent maintenance reserve, and no management fee.

vacancy allowance = $1,500 x 5% = $75.00
effective rent = $1,500 - $75 = $1,425.00
operating costs = $1,425 x 5% = $71.25
net rental income = $1,425 - $71.25 = $1,353.75
effective out-of-pocket = $2,600 - $1,353.75 = $1,246.25
coverage = $1,353.75 / $2,600 x 100 = 52.07%

So the rent covers about 52 percent of the payment, cutting the out-of-pocket housing cost from $2,600 to about $1,246 a month. If the same unit rented for enough to reach 100 percent coverage, the effective cost would fall to zero, and above that it would turn into positive cash flow.

The staying-rented caveat

Every figure assumes the space stays rented. A single vacant month means you cover the full payment yourself, which is why the vacancy allowance is built in and why a cash reserve matters. Rents, vacancy, and repair costs all vary, so treat the result as a planning estimate, not a guarantee of what a unit will rent for.

What this includes and excludes

It includes the gross rent, the vacancy allowance, a maintenance reserve, and an optional management fee, netted against your full housing payment. It does not model the purchase, income taxes and the depreciation shelter, utilities you may split with tenants, capital expenditures beyond the maintenance reserve, or the scenario after you move out and rent your own unit too. This is an estimate for education, not financial, legal, or tax advice.

Sources

U.S. Department of Housing and Urban Development and FHA owner-occupancy guidance: FHA loans require the borrower to occupy the property as a primary residence and permit two-to-four-unit owner-occupied purchases, the structure that makes house hacking possible with a low down payment.
Consumer Financial Protection Bureau, guidance on budgeting for a home and for the ongoing costs of owning and maintaining a property, at consumerfinance.gov.

Frequently asked questions

What is house hacking?: House hacking is buying a property, living in part of it, and renting out the rest so the rental income offsets your housing payment. The classic version is buying a two-to-four-unit building, living in one unit, and renting the others; renting spare bedrooms in a single-family home is the same idea. Because you live there, you can often use a low-down-payment owner-occupant loan.
Does house hacking cover the mortgage?: Sometimes fully, often partly. It depends on how the rent compares to your payment after a vacancy allowance and operating costs. This calculator shows the percent of your payment the net rent covers: at or above 100 percent the rent covers the whole payment (you may even have positive cash flow), while a partial offset still leaves a real out-of-pocket cost each month.
How do I calculate house hacking cash flow?: Start with the gross rent from the units or rooms you do not live in. Subtract a vacancy allowance (a percent of that rent) and operating costs such as maintenance and any management fee to get net rental income. Subtract that from your total monthly housing payment. A positive result is your out-of-pocket cost; a negative result means the rent more than covers the payment, which is positive cash flow.
What does my result mean?: If the rent covers the full payment, your effective housing cost is zero or negative, so you live for free or better. If it covers most of the payment, you are paying a fraction of what you would alone. A partial offset still cuts your cost meaningfully but leaves an out-of-pocket amount. Remember the figures assume the space stays rented, so keep a reserve for vacant months.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: House Hacking: Make Tenants Cover Your Mortgage

By Sam Sage Last reviewed July 2026.