What Is House Hacking & How To Live For Free

Have you heard of house hacking? With house hacking, you may be able to learn how to live for free! If you’re new to house hacking, it’s finding ways to make money while you live in your house. You hack your costs to possibly live free and maybe even make money. House hacking can be…

Michelle Schroeder-Gardner

Last Updated: February 29, 2024

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Have you heard of house hacking? With house hacking, you may be able to learn how to live for free!

If you’re new to house hacking, it’s finding ways to make money while you live in your house. You hack your costs to possibly live free and maybe even make money.

House hacking can be a great way to save money on your monthly living costs and even build equity in the property that you own.

After all, your housing costs are probably one of your highest monthly bills, if not the highest. Most homeowners spend around 30% of their monthly income on housing costs, which is a lot!

So what if you could find a way to lower your housing costs or use being a homeowner to your advantage?

Now, perhaps you recently put a down payment down on an investment property with the sole intention of house hacking it in order to better afford your monthly mortgage payment. Or maybe you are currently looking for ways to lower your monthly mortgage payment and you have some spare bedrooms that you could rent out.

Whatever your reason may be, as a homeowner, you may be able to save a lot of money and start house hacking.

Back when we were living in a traditional house, we house hacked for a little while and had a few different roommates live with us. The monthly rent we collected allowed us to lower our house payment and put more money in savings. 

We house hacked with our first house, and it was really great for us. Being able to set more money aside even helped me get ready to quit my job to become a full-time blogger.

I only house hacked for a short amount of time, but it was such a great experience, and I’ve heard the same thing from many other house hackers. 

Because house hacking can help you save money, make money, offset your mortgage payment and other housing costs, I wanted to create a post that explains what house hacking is and how to get started.

So if you are interested in house hacking, then please continue reading this article. Today, I will answer some of your common questions so that you can get started as soon as possible as a house hacker.

Related content on house hacking:

Guide to House Hacking for Beginners 

What is house hacking?

House hacking is when you find ways to make money from your home. You can do it with a multi-family property, house, apartment, additional dwelling unit, and so on.

Typically, house hacking means that you live in one room or unit, and then you rent out the other rooms/units and put that money towards your mortgage.

Depending on the situation, you may be able to earn enough to completely cover your monthly mortgage payment (plus more), or you may choose to earn just enough to cover some of your monthly housing bills. Whatever you decide to do, as a house hacker, you are lowering your monthly housing expenses and freeing up more of your money.

Is house hacking profitable?

Yes, house hacking can be very profitable!

From house hacking, you may earn a little bit of extra money to help pay down your mortgage, enough to cover your entire monthly housing costs, and perhaps even more so that you are able to save some money on top of paying down your mortgage.

Because there are so many different ways to house hack, it would be hard to say exactly how profitable it will be for you.

If you decide to start house hacking, I recommend starting an emergency fund as soon as possible. 

An emergency fund is exactly what it sounds like – it’s money you set aside in case of an emergency. Because house hacking means you’ll have other people living in your house, there may be a greater chance of repairs, and it will be your responsibility as the landlord to deal with them as quickly as possible.

Having an emergency fund can help you cover any unexpected expenses that may come up, such as rental property repairs or even needing to replace appliances. While house hacking can be profitable, it can also be expensive if you are not careful.

Is house hacking legal?

The rules for house hacking depend on where you live.

House hacking is legal in many places, but there may be simple rules that you need to follow, these may be city or even subdivision specific.

For example, some cities or neighborhoods may not allow Airbnbs and other short-term rentals, or they may have occupancy limits. You need to find out what the local laws in your area are before you start.

That being said, many people house hack all over the world, so it is likely that you will be able to find a way to make it work for you while also staying legal and following the rules.

Plus, you will have to comply with federal and state housing laws. The Fair Housing Act prohibits discrimination in housing because of race, color, national origin, religion, sex, familial status, or disability. You can learn more about this here.

What is a good house hacking book?

If you are looking for a good book on the subject of house hacking, then I recommend reading The House Hacking Strategy: How to Use Your Home to Achieve Financial Freedom by Craig Curelop.

This is a great book on house hacking and teaches you many different house hacking strategies, how to start house hacking for beginners (even if you don’t have much money), how to find the best property to house hack for your situation, and much more.

There is a lot of information packed into this book, making it a must-read if you’re interested!

Pros and cons of house hacking

Of course, like with anything, there are pros and cons. This is your home after all, and you want to make sure that you are fully prepared for what the reality of house hacking will be like.

You may have never lived with roommates before or have been a landlord, and that will affect your experience, so let’s talk about the advantages and disadvantages.

Benefits of house hacking include:

  • You can build home equity.
  • You can lower your housing costs significantly.
  • You can earn extra money and improve your cash flow.
  • You can have more freedom because your housing costs are covered. Perhaps, you’ll feel more free and flexible to pursue a passion project now?

Now, I will admit that I am a little biased because I had such a great experience.

But there are reasons why you shouldn’t house hack, and it definitely is not for everyone.

Here are the most common disadvantages to house hacking:

  • You will likely lose some privacy, especially if your situation involves renting out a room in your home.
  • Being a landlord can be incredibly stressful for some people.
  • There will be more wear and tear on your property.

When I was house hacking, I thought privacy would be more of an issue than it was. Fortunately, we had a basement to rent out that had a bathroom in it, and for the most part, our spaces felt very separate.

However, if you are in a situation that involves sharing a bathroom or other living spaces, such as a kitchen or living room, that can be too much for some people. If you like your privacy, then this is a big thing that you should think about before you rent out space in your actual home, and you may want to look into owning something like a multifamily property instead. This could make the experience far better for your personal situation.

As far as being a landlord, you will have to deal with problems with tenants. This may include covering the costs if something on your property breaks.

Keep all of those things in mind before you get started!

orange couch with words How To Live For Free - House Hacking

House Hacking Ideas

There are many different house hacking strategies that you may be interested in, and below are some house hacking examples.


1. Rent out rooms in your home

If you’re not interested in purchasing new real estate in order to get into house hacking, then the easiest way to get started may be to rent out rooms in your single-family home.

Yes, this means getting roommates.

So if you have a three bedroom home, you can decide to rent out the other two bedrooms, and then live in the third bedroom yourself. If you are renting out the home that you live in, then it means you may be sharing your kitchen, bathrooms, living room, and other spaces with someone who is a stranger at first.

Another option you might consider is to rent out rooms in your home on a short-term basis, such as through Airbnb or VRBO.

If you don’t currently have an extra bedroom or living space, you may need to convert a space into an accessory dwelling unit (ADU) such as a basement, a room above a garage, building a guest house, and more. You may decide to add a kitchenette or even a full bathroom in order to get a higher monthly rent from your tenants.

You can learn more about this at What You Need To Know About Renting A Room In Your House.


2. Multi-family home

A multi-family home can be a duplex, triplex, or apartment building. It simply means that it’s a structure built for multiple families to live in separate units. As far as house hacking, you would buy the whole building with the intention of living in one unit and renting out the other units.

One positive of this situation is that you would not be sharing personal space with anyone else. You would have tenants, and you would be their landlord.

The money that you earn from your tenants may be enough to cover your monthly mortgage payment for the whole building that you own, which means that you may be able to live for free. That’s a major perk!

Some people like to house hack this way because they are close to their tenants and can keep an eye on the building they own, but they are still able to maintain their own private and personal space. Not having to share common areas, such as your kitchen and bathroom, can be a great thing after all.

Recommended reading: 23 Best Real Estate Side Hustles To Make Extra Money


3. Rent out an RV on your property

Another possible form of house hacking is to rent out an RV that you have on your property or rent it out to others to travel in.

If you have an RV that you aren’t don’t use all of the time, then you may be able to earn $100 to $300 a day, or more, by renting it out to others through RVShare.

RVshare is like Airbnb for recreational vehicles.

You can rent all kinds of RV on the RVShare website, such as:

  • Camper vans
  • Travel trailers
  • Pop-ups
  • Class C Motorhome
  • Class A Motorhome
  • Toy hauler

RVshare has a secure payment system to accept payments from those renting out your RV and then securely releases the funds to your bank account one business day after the start of each rental.

The money that you earn from renting out your RV can help you lower your housing costs, which can be quite easy if you have an RV that you aren’t using all the time. Or perhaps the RV you rent out just covers your RV payment, which would be like “RV hacking” instead of house hacking, and you can then pay off your RV much faster in this scenario.

Related: Have an RV that you want to rent out? Check out How To Make Extra Money By Renting Out Your RV.


4. Closet, driveway, storage space

Do you have unused storage space? If so, you may be able to earn money with it.

Neighbor is a peer-to-peer rental platform and is like the Airbnb of storage space.

With Neighbor, you would not be renting out space for someone to live in, instead you are renting out your space so that people can store their stuff!

You can use Neighbor to list your unused space for rent and earn up to $15,000 per year. With Neighbor, you can rent out your garage, driveway, basement, or even an unused closet that you have. You can even rent out parking spaces, a shed, or room in your backyard.

You can set your own prices and decide for yourself what storage reservations you want to approve. You also reserve the right to know what the people are storing in your house and approve it before they rent space from you.

Because so many people pay to store their stuff, so this can be an in-demand business to get into. It’s also generally more affordable than traditional storage units, making it more appealing to renters.

You can sign up for Neighbor for free here.

You can also learn more in my Neighbor Review.


How to know if house hacking is right for you

Before you start renting out space in your house to save money or pay off your mortgage, there are a few questions I recommend asking yourself. It’s a big decision, and these questions will help you decide if this is the right choice for you.

What to ask yourself before house hacking:

  • What is my short-term goal for house hacking? Do I hope to make enough to pay my monthly mortgage? Or do I want to make a little extra each month to save or offset some housing expenses?
  • What is my long-term house hacking goal? Do you want to own rental properties one day?
  • Do you currently have extra space in your house to rent to someone? Or will this require purchasing a new property?
  • Are you in a good spot financially to start house hacking? At the very least, you will need to have an emergency fund. But if you need to purchase another property, consider all of the costs associated with that.
  • Will your house hacking plans require that you sell your current property? Some people may decide to keep their current home and rent it out as well. But if you are selling, what are the steps and costs associated with selling your house?
  • How do you feel about having roommates? Do you know anyone who would be a good fit, or would you be okay living with a stranger?
  • How do you feel about becoming a landlord? This involves collecting rents, repairing things, replacing things, and more. 

How you answer those questions will help you decide if house hacking is the right choice for you overall.

Is house hacking possible? Is house hacking worth it?

Yes, house hacking may be possible for you, and you may find it to be well worth it.

If you already own a home, then one of the easiest ways to start house hacking is by renting out spare space that you already have in your home. That could be to store other people’s stuff or like a bedroom for someone to stay in.

House hacking is a real estate investment strategy that can allow you to lower your expenses, improve your cash flow, and save money.

The rental income that you earn from your tenants as a house hacker can help you to pay down the mortgage on your primary residence, retire early, and possibly even allow you to purchase another rental property (if that’s a goal of yours – if not, you can simply just save more money!).

Through house hacking, you can live for cheaper or even free by simply using your owner-occupied investment property to your advantage. This may allow you to better afford the purchase price of a home, as well as lower your risk.

Who knows, maybe house hacking will even allow you to save enough money to put a down payment on your next investment property as well. This could put you on the right path to reaching your goal of becoming a real estate investor.

Are you interested in house hacking? Why or why not?

Recommended reading: How To Live Rent Free

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. That’s a very for sophisticated term “how’s hacking.” I’ve never heard of that before 🙂

  2. These are great ideas! I’m a multifamily syndicator (big properties) but these are great ways to get started in multifamily real estate investing. It’s how I did it, for the most part.

  3. Yes. I became an unexpected divorcee and assumed the mortgage on my home. I rent out the downstairs apartment to an adult child and his girlfriend and a Barndominium in my backyard. Rent nearly covers my mortgage, which allows me to work only part time so I can still be my kids’ full time caregiver. I think every single mom should look into this! Mothers do not benefit from nuclear family arrangements and this situation has had unexpected pluses for me.

  4. If I could do it all over again, I would have bought a house in college and rented rooms to my friends. What a great way to get started in the world! Alas, I wasn’t so educated back then. House hacking is the best way to get started with real estate investing, especially for those who don’t have a big down payment.

  5. Hi Carrie,

    I was wondering since you work part time, do you have a side hustle?