House hacking is one of the most accessible entry points into real estate investing. By living in one unit of a small multifamily property, you can use owner-occupied financing (3.5% FHA or 5% conventional down payment) while having tenants pay down your mortgage.
Benefits:
- Lower down payment than investment property financing
- Rental income offsets mortgage — often living rent-free or near free
- Learn landlording while minimizing risk
- Builds equity and cash flow simultaneously
After 1 year of owner-occupancy, many investors convert the property to full rental and repeat the process in a new home, building a portfolio with minimal out-of-pocket capital.
Related Terms
DSCR
Debt Service Coverage Ratio — measures a property's income vs. its mortgage payments.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle capital into multiple properties.
Buy and Hold
Acquiring rental properties to hold long-term for recurring cash flow, appreciation, and tax benefits.