Finally signed up for the paid plan so I could use the BP Analysis Calculator. How do you guys calculate a house hack?
I was just cutting the price, property tax & closing cost into half what I think it'll be for the entire property. Then putting in the individual expenses like home insurance, utilities, vacancy rate, etc for just this side of the property. Is that the most accurate way to do it?
Wanting to see if there will be enough cash flow to contribute to my "side" of the mortgage. Didn't think putting the entire property cost would give accurate numbers since there won't be any vacancy or income on my side, haha.
Real Estate Consultant · Fort Myers, FL · Member since 2025 · 6 posts · 1 vote
8mo
Hi Alison! Good question because I think this is a really common point of confusion with house hacks.
The best way to analyze it is to underwrite the entire property as a rental, not split the purchase price or fixed costs in half. Taxes, insurance, debt service, and closing costs exist whether you live there or not.
Then, once you have the full-property cash flow, think of your unit as an offset to your housing expense rather than a separate “deal.” In other words, ask:
What would my mortgage be if I lived there alone? How much does the other unit or units reduce that number?
For variable expenses like utilities, vacancy, and turnover, it’s okay to allocate more realistically, but I wouldn’t halve the fixed costs in the calculator.
If the deal works or is close as a full rental, it’s usually a solid house hack.
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
8mo
So what you need to do is calculate the full income & expenses for the entire property - just as if it were a regular rental.
Why would your property tax be half? Why would your closing costs be half? Insurance? It won't be, it'll be the exact same. The expenses are the same.
The only difference is that you will have one source of income instead of 2. What you're looking for is to have the one source of income (renter) minus expenses cover your half of the income. So it's unlikely you'll make anything, but you may end up spending less on housing than you otherwise would.
As far as utilities - I generally want separate meters for everything. If not, there's various ways to split the utilities (charging a flat fee, charging after you get the bill etc).
The other replies are right on the mechanics — you should underwrite the entire property as a rental, not split fixed costs. Taxes, insurance, debt service, and closing costs don’t care which unit you live in.
One thing I’d add that’s often missed: when house hacking, I always stress-test the deal assuming you move out in 1–2 years and it becomes a full rental.
If it still meets your minimum DSCR and cash flow targets as a full rental, it's usually a solid house hack. If it only works because you're living there, that's fine — but it's a different risk profile and should be treated as such.