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# House Hacking Numbers: How to Tell If a Duplex, Triplex or Fourplex Actually Works
- URL: https://landlordsheet.com/house-hacking-numbers/
- Published: 2026-10-16T13:51:33.000Z
- Updated: 2026-10-16T14:02:34.000Z
- Description: The two numbers that decide a house hack, your effective housing cost today and your cash flow after you move out, and how to calculate both honestly.
- Author: Jon
- Tags: Deal Analysis, Investing

House hacking means buying a small multifamily (or a home with an ADU or rentable rooms), living in one part, and renting out the rest. Done well, your tenants cover a big share of your housing cost while you build equity and learn landlording at small scale.

Done carelessly, you end up paying more to live in a fourplex than you paid to rent an apartment, with a toilet to fix at 2 a.m.

The difference is almost always the numbers. Here's how to run them honestly.

## The two questions that matter

A house hack has two lives, and you need to analyze both:

1. **While you live there:** what is your *effective* monthly housing cost, and how does it compare with renting?
2. **After you move out:** does the property work as a pure rental, with every unit leased at market rent?

A property that's great for question one and terrible for question two can trap you. One that passes both is a strong candidate.

## Step 1: Get the full monthly payment (PITI and then some)

Start with a real lender quote, not a mortgage calculator's default rate. Owner-occupied financing often allows a lower down payment than investment loans, but programs vary, and mortgage insurance may apply.

Your monthly payment includes:

- **Principal and interest** on the loan
- **Property taxes** (look up the actual tax bill, and ask whether it will be reassessed after the sale)
- **Insurance** for a multifamily you live in. Ask your agent about the right policy type.
- **Mortgage insurance** (PMI on conventional loans, MIP on FHA loans) if your down payment is small
- **HOA dues**, if any

That's your **PITI**. Don't stop there.

## Step 2: Count reserves, not just the mortgage

Owning a rental means costs that don't show up every month but always show up eventually:

- **Vacancy** on the units you rent out
- **Repairs and maintenance**
- **CapEx** (roofs, water heaters, flooring); see [how much CapEx reserve per unit](https://landlordsheet.com/capex-reserve-per-unit/)
- **Utilities** the owner pays (often water, sewer, trash, sometimes common-area electric)
- **Management**, even if it's zero while you self-manage

A common approach is to estimate vacancy, repairs and CapEx as a percentage of rent on the rented units. Choose conservative numbers for the specific property's age and condition.

## Step 3: Calculate your effective housing cost

> Effective housing cost = PITI + owner-paid utilities + reserves on rented units − rent from units you don't live in

Compare that with what you pay in rent today. That difference is the real monthly benefit (or cost) of house hacking.

## Step 4: Calculate the move-out numbers

Now pretend you've moved out and rented your unit at market rent:

- **Gross rent** \= all units at market rent
- **Operating expenses** \= vacancy, repairs, CapEx, management (budget for it even if you plan to self-manage), owner-paid utilities, taxes, insurance, HOA
- **Net operating income (NOI)** \= gross rent − operating expenses
- **Cash flow** \= NOI − loan payment (principal, interest and mortgage insurance)
- **Cash-on-cash return** \= annual cash flow ÷ cash you invested (down payment, closing costs, up-front repairs). See [how to calculate cash-on-cash return](https://landlordsheet.com/how-to-calculate-cash-on-cash-return/).

## A worked example (hypothetical numbers)

A triplex for **$480,000**, with **3.5% down**, a 6.5% rate, mortgage insurance, $7,200/year taxes and $2,400/year insurance. You live in Unit 1\. Units 2 and 3 rent for $1,450 each. Your unit would rent for $1,500\. You currently pay $1,800 in rent.

**While you live there:**

- Total monthly payment (P&I, taxes, insurance, mortgage insurance): about **$3,995**
- Rent from Units 2 and 3: **$2,900**
- Reserves on those units (vacancy 5%, repairs 6%, CapEx 6%): about **$493**
- Owner-paid utilities: **$250**
- **Effective housing cost: about $1,838/month**

That's slightly *more* than the $1,800 you pay to rent now. You'd be building equity and gaining experience, but you're not "living for free."

**After you move out:**

- Gross rent, all three units: **$4,400**
- Operating expenses (vacancy, repairs, CapEx, 8% management, utilities, taxes, insurance): about **$2,150**
- NOI: about **$2,250**
- Loan payment (P&I plus mortgage insurance): about **$3,195**
- **Cash flow: roughly −$945/month**

This example is a cautionary one: fine-ish to live in, but it loses money as a rental at these numbers. You'd want a lower price, higher rents, a bigger down payment or a lower rate before it works on both tests. That's the point of running the numbers before you fall in love with the house.

## The FHA self-sufficiency test (3–4 units)

If you're using an FHA loan on a three- or four-unit property, lenders generally apply a **self-sufficiency test**: roughly, whether 75% of the total market rent for all units (including yours) covers the full monthly payment. In the example above, 75% of $4,400 is $3,300, which is below the \~$3,995 payment, so it would likely fail. Your lender's underwriting is the final word; use this only as an early heads-up.

## Factors that make or break a house hack

- **Purchase price and rate.** Small changes swing the whole result.
- **Unit mix.** Larger rentable units (or a separate ADU) often produce more rent per dollar of price.
- **Separate meters.** Owner-paid utilities on a whole building add up quickly.
- **Condition.** Deferred maintenance shows up as CapEx in year one.
- **Your own lifestyle.** You'll live next to your tenants. Be sure that suits you.
- **Owner-occupancy rules.** Owner-occupied loans usually require you to live there for a set period. Confirm with your lender.

## Use a spreadsheet, and compare more than one property

Run every candidate through the same math and compare them side by side. The [Rental Deal Analyzer ($19)](https://payhip.com/b/vNzcd?ref=landlordsheet.com) handles the move-out rental analysis (cash flow, cap rate, cash-on-cash, DSCR), and the [Loan Amortization & Payoff Tracker ($15)](https://payhip.com/b/lHihL?ref=landlordsheet.com) shows how fast you build equity and what extra principal does. A dedicated [**House-Hack Calculator ($19)**](https://payhip.com/b/7Wz9e?ref=landlordsheet.com) (effective housing cost vs. rent, move-out cash flow, the FHA heads-up check and a three-property comparison) is available now in [the Toolkit](https://landlordsheet.com/toolkit/).

Once you close, track every dollar from day one with the [free Single-Property Tracker](https://payhip.com/b/DORST?ref=landlordsheet.com). House hacking gets tricky at tax time because only the rented portion is a rental, so clean records are a must. Read [Schedule E categories for landlords](https://landlordsheet.com/schedule-e-categories-for-landlords/) and ask your tax pro how to split shared expenses.

## Quick checklist

- \[ \] Real lender quote: rate, mortgage insurance, closing costs
- \[ \] Actual tax bill and insurance quote
- \[ \] Market rent for every unit, including yours
- \[ \] Conservative vacancy, repairs and CapEx
- \[ \] Effective housing cost vs. your current rent
- \[ \] Move-out cash flow and cash-on-cash
- \[ \] FHA self-sufficiency check (3–4 units, FHA only)

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*This article is for general educational purposes and is not financial, lending or tax advice. Loan programs, mortgage insurance and qualification rules come from your lender. Example figures are hypothetical. — Jon, Everyone's Landlord*