For most people, housing is the biggest monthly bill they will ever pay. House hacking turns that bill into an investment. The idea is simple. You buy a property, live in part of it and rent out the rest, so your tenants cover some or all of your mortgage. It is one of the most popular ways to get into real estate investing because it solves two problems at once. You get a place to live, and you start building a rental portfolio with less money than a typical investment property requires. The classic house hack is a small multifamily property. You buy a duplex, triplex or fourplex, move into one unit and rent out the others. Each unit has its own kitchen, bathroom and entrance, so you get privacy while your neighbors pay rent. If a multifamily property is out of reach, a single-family home can work too. Some owners rent out spare bedrooms to roommates. Others convert a basement, attic or garage into a separate apartment, or build an accessory dwelling unit in the backyard where local zoning allows it. Short term rentals are another option, where you rent a room or unit to travelers for higher nightly rates, though many cities now limit or ban them. The real advantage of house hacking is the financing. Because you live in the property, you can usually qualify for an owner occupied mortgage, which comes with lower down payments and better rates than an investor loan. In the US, FHA loans allow as little as 3.5 percent down on properties with up to four units. VA loans can require no down payment at all for eligible veterans and service members, and conventional loans also offer low down payment options for owner-occupants. These loans come with conditions. You generally need to move in within about 60 days of closing and live there for at least a year. Many lenders will also count a portion of the expected rent from the other units toward your income, which can help you qualify for a larger property. Loan rules change, so confirm the current requirements with a lender before you shop. Here is how the numbers might look on a hypothetical deal. Say you buy a duplex for $400,000 with an FHA loan and put down 3.5 percent, or $14,000, plus closing costs. At a 6.5 percent rate on a 30 year loan, your principal and interest come to about $2,440 a month. Add roughly $450 for taxes and insurance and about $180 for mortgage insurance, and your total housing payment is around $3,070. Now rent the other unit for $1,900 a month. After setting aside about $200 a month for repairs and vacancy, your own cost of living there drops to roughly $1,370. If a similar apartment in your area rents for $1,800, you are saving over $400 a month while building equity in a property you own. When you eventually move out and rent both units, the property can start producing positive cash flow. Your own market, rate and expenses will change these figures, so run the math for your specific deal. The benefits go beyond a lower housing bill. Every mortgage payment builds equity, partly funded by your tenants. You learn to be a landlord on a small scale, with the property right next door where you can keep an eye on it. Rental income and expenses can also bring tax advantages, such as deducting a share of repairs and depreciation for the rented portion. And once your owner occupancy period ends, you can move into your next house hack and keep the first property as a rental, growing a portfolio one move at a time. There are tradeoffs to weigh. Living next to your tenants means less privacy, and some will knock on your door at inconvenient hours. A vacancy or a tenant who stops paying hits your personal budget directly. Small multifamily properties can need more maintenance than a single family home, and you take on the legal responsibilities of a landlord, including fair housing rules and local tenant laws. House hacking works best for people who are comfortable with that closeness and have savings set aside for surprises. If you are ready to try it, start by talking to a lender about which owner occupied loans you qualify for and how much of the expected rent they will count. Then study your market. Look up what similar units actually rent for, check local zoning if you plan to add an ADU or rent rooms, and get a thorough inspection before you buy. Keep separate, organized records for the rental side from the first day, tracking rent, repairs and shared expenses. Clean books make tax time easier and show you clearly how the property is performing. House hacking is one of the most accessible ways to start investing in real estate. It lowers your cost of living, builds equity and teaches you the landlord skills you will need for future deals, all with a small down payment. For many investors, it is the first step toward a portfolio that pays for itself.