Why Multi-Unit Property for House Hacking?

Why Multi-Family?

Housing is the largest cost for most of us. That large line-item in our monthly budgets doesn’t allow us to do things like save for emergencies or retirement. The concept of house-hacking is getting rid of that expense through creative means.  A Multi-Unit Property can be a great option for House Hacking.

While not for the faint of heart, there are some options for slashing or eliminating that expense. I’m not going to discuss moving back in with your parents, living in a tent, or finding a sugar daddy/mama to pay the bills.  Frankly, none of those have ever been options for me, so I have no experience.  What I do have experience with is buying a multi-unit property, living in one and renting out the rest to pay for the mortgage and expenses.   

House-hacking: the concept of getting rid of, or greatly decreasing your monthly Housing costs through creative means

Multi-unit Property as House Hack

Reasons a Multi-unit property is ideal for House Hacking to Slash Expenses:

Favorable Financing & Tax Benefits

If you’re buying a multi-unit property and are going to live in, you qualify for all the same housing benefits of anyone buying a single property home. That means you may have lower down payment requirements, and qualify for the lowest mortgage rates and fees. If you were buying a rental property, not planning to live in it, you would have to apply for an investment property loan.Those almost always require 20% down, and have higher rates.

Although complicated, there are definitely tax benefits to being a property owner and landlord. You can deduct from rental income expenses incurred, such as mortgage interest, property taxes, repair costs. Tax preparation costs, as well (which you’ll probably need, like I said, its complicated!) You get to deduct a depreciation value, as well. Depreciation and how it is recouped upon sale of a property is something you need to know about. It is too much information for this post. Here’s a link for a good rental property tax 101


With lots of other House-Hacking options, you don’t have a ton of privacy. If you’re, let’s say, loaded up on roommates, or living in your parents basement. Living in one unit of a multi-family, you do still have your own kitchen, can entertain people as you see fit. If you have kids, having roommates may not really be an option. Or, if you’re just a semi-cranky neat freak, like myself.

Makes Land Lording Easier

For one thing, when you’re finding tenants, explaining that their landlord will be right next door, well…that seems to naturally keep away people who would not like scrutiny. In my experience, you end up with good tenants. Being at the property so often, you see things that tenants might not call to your attention. You will notice the gutter is coming loose, or the sprinkler is pointing out into the street, etc. You can be more on top of things and preempt bigger problems. Of course, there are times when you would like to be able to take off your ‘Landlord Hat’ and just be at home. That isn’t really possible. However, I find living on the property to overall be a net gain as far as managing the property.

Flexibility and Security

Having a multi-unit provides you with options. You can live in part, rent out part. You can choose to live in the bigger portion, or the smaller portion, depending on your property and needs. This gives you flexibility with your income and expenses. Once you’ve met the obligation of the mortgage, living there as an owner-occupant, you can rent out the whole thing. (At least 1 year of occupancy is generally required.) Having multi renters means that you’re less likely to have such extreme drops in income. Generally, you won’t have all units vacant at once, so cash flow is smoothed out.

Lessons Learned from my House Hack

I was very fortunate and found a pretty nice triplex that needed minimal work on two of the three units. The worst of the units, of course, the one that I set aside for myself! What I wished I’d known:

  • Everything takes longer than you’d think. There’s the rule, ‘estimate how long its going to take you to do something, and then double it!’ Well I say, ‘and then add half again!’ Be sure to budget plenty of time for getting things ready for renters.
  • There will be problems. As much as you do your homework, dot your i’s and cross your t’s, things will pop- up and you have to be able to roll with them. And have a little extra savings for them, as well!
  • You CAN do it. While the process is long, and things come up, it is possible to find the right property for you, get the financing, get the tenants, get your land lording confidence and skills. If I can do it, anyone can!
  • How good it feels to live RENT FREE! It took just about a year for me to actually get to the point where 100% of my mortgage, utilities, and I was able to put away for repairs and capital expenditures with the income from my tenants. But once I was there, I felt so FREE! Having that basic taken care of, I’m able to save so much more towards my goal of total Financial Independence. It also made me feel like I didn’t have to be as afraid of things like job loss, and even opened my mind to ideas of being able to take more career risks.
Cutting housing costs to ultimately put that money to better use.


Buying a Multi-Unit property in order to House-Hack does require certain prerequisites, such as, money for down payment and a decent credit score. It is not for everyone. But it is something to consider if you want to really slash spending and amp up savings. There is a simple answer to why use Multi-Unit House Hacking for me. I personally have been able to save about $10k a year that previously went to housing expenses, all while building equity in a property, as well.

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