Have you ever heard of the term “house hacking”? You may have seen it on social media or in real estate investing circles, but you’re not quite sure what it means. In a nutshell, house hacking is purchasing a multi-unit property and living in one unit while renting out the other to cover most of your mortgage payments and living expenses.
Sounds pretty good so far, right? And it can be, but you should be aware of some downsides to house hacking before taking the plunge. In this blog, we’ll talk about house hacking to help you decide if it’s the right move for you.
How House Hacking Works
There are a few different ways investors go about house hacking, but the most common method is to purchase a duplex, triplex, or fourplex and live in one unit while renting out the others. This allows you to increase your cash flow by having tenants cover most of your mortgage payments.
Pros Of House Hacking
One of the biggest advantages of house hacking is that it allows you to get started in real estate investing with very little money down. For example, if you purchase a duplex for $200,000 with an FHA loan, your down payment would only be $3,500 (assuming you put 3.5% down). Compare that to a single-family home purchase where you would need at least 10-20% down ($40,000-$80,000 on a $200,000 home), and it’s easy to see why house hacking can be such an attractive option for new investors.
Another advantage of house hacking is that it allows you to live in an expensive market without having to pay full price for rent or a mortgage. Let’s say you want to live in Naples, Florida, but can’t afford the high prices. If you were to purchase a duplex for $1 million and live in one unit while renting out the other unit for $3,000/month, your total monthly housing costs would only be $2,000/month ($1 million mortgage at 3%, plus $1,000/month in property taxes and insurance). That’s much more affordable than renting or buying a single-family home in Naples.
Cons Of House Hacking
On the flip side, one of the biggest disadvantages of house hacking is that it ties up your liquidity. If something unexpected comes up and you need quick access to cash, selling a rental property can take months.
Another disadvantage is that being a landlord takes time and effort- if you’re not prepared for mandated repairs or late-night phone calls from tenants, then house hacking may not be right for you.

So what’s the verdict? Is house hacking worth it? Our real estate agents think so―but ultimately, the decision comes down to your circumstances. If done correctly, house hacking can be an excellent way to start real estate investing with very little money down.
At Southwest Florida R.E. Group, we can help you do the homework and find the property that meets your requirement and fits your budget.
You can look at our city guide if you want to buy a home in Naples, FL.
Contact us today to learn more about our services.