House Hacking: Turning Your First Home Into an Investment
Living in One Unit, Renting the Rest — A Growing Gen Z Trend
With high home prices and rising living costs, today’s first-time buyers are rethinking the traditional path to homeownership. Enter house hacking — a creative strategy that lets you live for less (or even for free) while building wealth through real estate.
🧩 What Is House Hacking?
House hacking means purchasing a property, living in one part of it, and renting out the rest. This could be:
A duplex, triplex, or fourplex, where you live in one unit and rent the others.
A single-family home with a finished basement, guest suite, or spare bedrooms you rent out.
Even a home with an ADU (Accessory Dwelling Unit) that generates extra income.
The rent from your tenants helps cover (or even exceed) your mortgage, utilities, and property taxes — effectively turning your first home into an income-producing asset.
👩💼 Why Gen Z Loves This Strategy
Gen Z buyers are financially savvy and tech-empowered. They’re entering a market where affordability is a major challenge, yet they understand the long-term power of real estate.
Lower living costs: Rental income reduces monthly expenses.
Investment growth: Property values appreciate while tenants pay down your loan.
Financial independence: Generates cash flow and builds equity early in life.
Tax advantages: Certain deductions and depreciation benefits can apply.
🏗️ The Best Properties for House Hacking
When exploring house-hacking opportunities, focus on:
Multifamily properties (2–4 units): Easier financing with FHA or conventional loans.
Flexible zoning areas: Cities that allow ADUs or short-term rentals.
Walkable or transit-friendly neighborhoods: Higher rental demand and consistent occupancy.
📈 Real-World Example
Imagine buying a $450,000 duplex with 3.5% down using an FHA loan. You live in one unit and rent the other for $1,600/month. That rent could cover nearly 70–80% of your mortgage payment, drastically lowering your living costs while building long-term equity.
🌱 The Big Picture
House hacking isn’t just a financial move — it’s a lifestyle choice that aligns with flexibility, community living, and smart investing. Whether you’re in your 20s starting your career or a millennial re-entering the market, this approach offers a practical way to grow wealth without waiting decades to “afford” a rental property.