House Hacking: How to Live for Less and Invest in Real Estate
When people think about real estate investing, they often imagine buying a rental property separate from their own home. But what if I told you that your very first home could also be your first investment? That’s the magic of house hacking—a strategy that allows you to live in your property while renting out part of it to offset your mortgage (or even turn a profit).
Whether you’re dreaming of financial freedom or just want to make homeownership more affordable, house hacking is one of the smartest ways to start real estate investing without a huge upfront investment. Let’s break it down.
What Is House Hacking?
House hacking is when you buy a home and rent out part of it to help cover your housing costs. This could mean:
✔️ Renting out a basement apartment, guest house, or ADU (Accessory Dwelling Unit)
✔️ Buying a duplex, triplex, or fourplex and living in one unit while renting out the others
✔️ Renting out a room or portion of your house to a long-term tenant or even using Airbnb for short-term stays
✔️ Turning a garage, loft, or bonus space into a rental unit (where local regulations allow)
The goal? Your tenants help pay down your mortgage, reducing or even eliminating your biggest monthly expense. And because you’re living in the property, you can qualify for lower down payments and better financing than if you were buying a traditional investment property.
How House Hacking Saves You Money
Let’s say you buy a duplex for $600,000 with an FHA loan (which allows for as little as 3.5% down). You live in one unit and rent out the other for $2,000/month. If your mortgage, property taxes, and insurance total $4,000/month, that rental income cuts your living expenses in half!
Over time, as your home appreciates and your tenants help pay down the mortgage, you’re building equity and learning the ropes of real estate investing—without needing a huge upfront investment.
House Hacking in Seattle & Surrounding Areas: What You Need to Know
✔️ Basement apartments: Many homes in Seattle, Tacoma, and the Eastside have unfinished basements that could be converted into rental units (check zoning laws first!).
✔️ ADUs & DADUs: Cities like Seattle and Bellevue allow backyard cottages (DADUs) and basement apartments (ADUs) in many residential areas, making them a great house-hacking option.
✔️ Multifamily properties: Duplexes, triplexes, and fourplexes exist, but they’re competitive! Start looking in areas like South King County, where prices may be more accessible.
✔️ Short-term rentals: Platforms like Airbnb can be profitable, but Seattle has regulations on short-term rentals, so be sure to check local rules.
How to Get Started with House Hacking
Thinking of giving this strategy a shot? Here’s where to begin:
1️⃣ Choose the right property – Look for homes with an ADU, a duplex/triplex, or an extra space that could be legally rented.
2️⃣ Understand financing options – FHA and VA loans allow low down payments, making house hacking more accessible.
3️⃣ Check local rental laws – Every city has different regulations on rentals, ADUs, and zoning.
4️⃣ Run the numbers – Make sure the rent you can charge will meaningfully offset your mortgage.
5️⃣ Find the right tenants – Whether it’s a long-term renter or an Airbnb guest, choosing good tenants is key to making house hacking stress-free.
Why This Strategy Works (Even if You’re Not a Landlord Type)
Not everyone dreams of managing rental properties, and that’s okay! House hacking can still work for you. You can hire a property manager, use a short-term rental service, or keep it simple with a long-term tenant in a separate space.
The bottom line? Your first home can be your first step into real estate investing—helping you build wealth while keeping your housing costs low.
If you’re curious about finding a home that works for house hacking, Katie can help! Whether you’re looking for a duplex, a property with an ADU, or just want to explore the possibilities, reach out for a chat.