How to use the house hacking calculator
- Enter the purchase price, the down payment and the loan rate and term.
- Enter the monthly taxes, insurance, HOA and upkeep, and the utilities you pay.
- Enter the total rent you expect from roommates or a unit, and the share of time the space sits empty.
- Read your net housing cost each month, the share of the cost the rent covers and the loan payment.
Formula
Loan = price x (1 - down payment %)
Payment = loan x i x (1 + i)^n / ((1 + i)^n - 1)
Monthly cost = payment + taxes, insurance, HOA and upkeep + utilities
Net cost = monthly cost - rent x (1 - empty %)
A negative net cost means the rent more than pays for the home, and the page then reports it as a surplus. Rent is counted after the share of time the space is empty.
A $400,000 home with a roommate
With 10% down the loan is $360,000. At 6.5% over 30 years the payment is $2,275.44. Add $900 for taxes, insurance and upkeep and $250 of utilities and the home costs $3,425.44 a month.
Rent of $1,500 with the space empty 5% of the time counts as $1,425, so the net cost is $3,425.44 - $1,425 = $2,000.44 a month, or about $24,005 a year. The rent covers 41.6% of the cost. If rent were $4,000 with no empty time, you would have a surplus of $574.56 a month.
What house hacking means
House hacking is living in a home while renting out part of it, such as a room, a basement unit or one side of a duplex. The rent lowers what the home costs you to live in. The key numbers are the loan payment, the costs the rent does not cover and how often the space is actually occupied.
What to check before relying on it
Rental income is usually taxable, and rules for loans, zoning, leases and landlord duties depend on where you live. Repairs between tenants, a tenant who pays late and the time it takes to manage a rental are real costs. Mortgage insurance and the deductions you may be allowed are not modeled here. Treat the result as a planning estimate.
For a full rental analysis use the Rental Property Calculator, to check what you can afford to buy use the Mortgage Affordability Calculator and for the total cost of owning use the Home Ownership Cost Calculator.
Assumptions and limits
- The loan has a fixed rate and level payments, and costs stay the same each month.
- Rent is the total collected when every room or unit is occupied.
- Empty time reduces rent by the percent you enter.
- Nothing is uploaded. Calculations run in your browser.
Frequently asked questions
Does the rent cover the whole mortgage?
That depends on your numbers. In the example the rent covers 41.6% of the full monthly cost. Raise the rent or lower the price to see when the net cost reaches zero.
What should I enter for the empty share?
Estimate the share of the year the space will have no tenant, including the gap between tenants. Five percent is only an example. A shorter lease or a seasonal market may call for more.
Are taxes on rental income included?
No. Rental income and deductions are treated differently depending on where you live, so this page leaves them out. Ask a tax professional how your rental would be treated.
Why include utilities?
If you pay the utilities for the whole home, the tenant's share is part of what the rent has to cover. Enter what you pay in total, and raise the rent if you include utilities for the tenant.