Is house hacking legal?

House hacking has been and is still becoming a popular investment strategy that allows you to live in a property while generating rental income. It can be a great option if you’re looking to start real estate investing. But is house hacking legal? 

Yes! House hacking is perfectly legal in most jurisdictions, but you must follow specific rules and regulations related to renting out property to do it safely and legally. They include local zoning laws, fair housing laws, and health and safety regulations. Follow the setup rules and regulations to avoid landing yourself in legal problems. 

In this article, we’ll explore what “house hacking” means, how to do it, and the best places for house hacking. Keep reading to find out more.

What is house hacking?

The term “house hacking” describes the practice of purchasing a piece of property, such as a residential complex with multiple units, and living in one while renting out the others to cover the property’s upkeep. You can purchase a duplex, triplex, or fourplex and live in one of the units while renting out the others. 

You’ll be able to generate rental income to offset ownership costs, such as mortgage payments, property taxes, insurance, and maintenance expenses. 

In addition to helping reduce housing expenses, house hacking can offer several other benefits. For example, building wealth- by leveraging rental income to pay for housing costs, as house hackers, you can use the savings for other investments or pay down debt.

How to house hack with no money

It is a big challenge to house hack with no money. You will typically need some initial capital to purchase a multi-unit property. However, you can use a few strategies to overcome such a challenge.

Partner with a co-owner

You can look for someone interested in house hacking and willing to go in on the purchase with you. This can allow you to pool resources and create a larger down payment.

Look for owner-financed properties.

Some property owners may be willing to finance the purchase for you, either through a mortgage or a land contract. This can allow you to avoid the need for a traditional down payment.

Consider a lease-to-own option.

Find a landlord who will allow you to rent the property for a given period of time with the possibility of buying it afterward. This can allow you to build equity in the property over time and eventually take ownership.

Participate in a real estate crowdfunding platform.

You can invest as little as $500 into real estate investments on several crowdfunding sites in the industry. This can allow you to get a stake in a property without coming up with a sizable down payment.

Apply for government grants or loans.

Government programs or grants may be available to help purchase a multi-unit property, especially in a low-income area.

Keep in mind that these options may come with their own set of challenges and limitations. Therefore, you must conduct thorough research and understand the terms and conditions before pursuing any of the options. Additionally, consulting with a financial advisor or real estate attorney is essential to ensure you make a sound investment.

Why you shouldn’t house hack

While house hacking can effectively reduce housing costs and build wealth, it is not without its challenges and risks. Some reasons why you might not want to house hack include

Increased responsibility.

You become the new landlord to the people you decide to share your space with. That means you are responsible for the maintenance and repair of the property and the well-being of your tenants. This can be a lot of work and require a significant time commitment.

Risk of vacancy

If one of your units becomes vacant, you will no longer receive rental income to offset your housing costs, which can be a financial burden.

Legal and regulatory compliance.

You need to be knowledgeable about the rules and legislation that affect landlords, such as fair housing, health and safety, and rent control laws. You run the danger of expensive litigation or fines if you are not aware of these regulations.

Dealing with tenants.

There is always that push and pull between a landlord and tenants. Some when you start renting out your units. It can lead to conflicts with tenants, especially if they are not paying rent or following the lease terms. Resolving these issues can be time-consuming and stressful.

Financing challenges.

Obtaining a mortgage for a multi-unit property can be more difficult and expensive than getting a single-family home. Additionally, mortgage lenders may restrict the use of rental income to qualify for a loan.

These are some of the challenges you should carefully consider and other potential risks before pursuing house hacking. If you do decide to pursue this strategy, it is recommended that you work with a real estate attorney or financial advisor to ensure that you are making a sound investment.

How many times can you house hack?

There is no set limit to the number of times you can house hack, as it depends on several factors, such as

Your financial situation.

If you have the financial resources to purchase multiple properties and generate enough rental income to cover the costs of ownership, then you could potentially house hack numerous times.

Real estate market.

The availability and cost of multi-unit properties in your area will play a role in how many times you can house hack. Finding affordable multi-unit properties may be more difficult if you live in an area with high property values and limited inventory.

Local laws and regulations.

Some cities and states have laws and regulations that limit the number of units you can own or rent out or that regulate the use of properties for short-term rentals. It is essential to familiarize yourself with the laws and regulations in your area to determine if there are any limitations on how many times you can house hack.

Best places to house hack

CityStateMedian Property priceAverage monthly rate
Fort WayneIndiana$172,600$1,046
Baltimore Maryland$195,000$1,542
RochesterNew York$99,900$1,278

The best places to hack will vary depending on your circumstances and goals. Still, here are some factors to consider.


Look for areas with affordable real estate prices, as this will increase the chances of finding multi-unit properties within your budget.

Strong rental demand

You should consider areas with high demand for rental properties, as this will increase the chances of finding tenants for your rental units.

Job market

Look for areas with a strong job market, as this will attract potential renters and may help to ensure stable rental demand.

Proximity to amenities

People will always consider areas close to shopping, restaurants, public transportation, and other amenities, as this can make your property more attractive to potential renters.

Population growth

Look for areas experiencing population growth, which may indicate a growing demand for rental properties.

Landlord-friendly regulations

Familiarize yourself with the local laws and regulations that apply to landlords, as some areas may have more restrictive regulations or higher costs associated with being a landlord.


Is house hacking legal? It is legal if you keep up with rules and regulations related to renting out a property, including local zoning laws, fair housing laws, and health and safety regulations. 

The ability to house hack multiple times will depend on your personal circumstances, financial goals, and the market conditions in your area. 

It is also essential to consider your personal preferences and goals, such as whether you prefer urban, suburban, or rural areas and are looking for a long-term or short-term investment. 

It is recommended that you consult a real estate agent or a financial advisor familiar with the local real estate market to help you identify the best places to house hack and if it’s a viable investment strategy.

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