How to House Hack By Renting-By-The-Room

House hacking is a great way to build wealth when you’re just starting out in real estate, but it can sometimes be complicated. How do you know what house is suitable for a house hack? How do you find tenants?

This guide will take a deep dive into the most straightforward way to house hack, including answers to those questions and more.

Start With Your “Why”

House hacking is where you leverage spaces/rooms in a home to generate additional income that offsets the homeowner’s living expenses. Renting rooms in a home can drastically reduce the costs of what a homeowner would be paying for mortgage and utilities and can even mitigate the entirety of a homeowner’s living expenses. That’s why this real estate strategy is so popular among aspiring real estate investors and those searching for financial freedom. House hackers can tremendously increase their income overnight simply by moving into a home and making living arrangements available to others. 

When it comes to house hacking, starting with your “why” in mind is paramount. House hacking can have huge financial benefits, but it comes with sacrifices and challenges, such as giving up your privacy, learning the ropes of being a landlord, and dealing with potential roommate conflicts. Knowing why you would willingly enter those situations is key to helping you find the right home and to keep you motivated. 

Examples of your “why” could be: 

  • Financial freedom in 10 years
  • To own five properties in the next five years
  • To have virtually no living expenses 
  • To be able to give generously to a cause you love

My wife and I wanted to move towards financial freedom, and I wanted the ability to start my own business without sinking us financially. We came up with a goal to completely offset our mortgage through house hacking. Upon taking the leap and achieving our goal, that gave us the margin in our budget to start my business and continue taking other steps towards financial freedom.

With a “why,” you’re much more likely to pull this off.

Finding The Right Home

To house hack well, you need to find a home you can afford. You also need one that will allow you to rent out rooms at the rates required to meet the financial goals you’ve set. Sounds simple enough, right? There are actually several steps involved. Let’s break them down. 

Create your goals

Any and every property could be a potential house hack. Refining your goals will allow you to narrow down the multitude of homes available in your market to only the homes that make sense for you. It’s helpful for this goal to actually have a dollar amount attached to it.

Here are examples of house hacking goals:

  • I want my rental income to equal my mortgage payment 
  • I want my out-of-pocket living expenses after rental income to be less than what I currently pay in rent
  • I want to pay less than $1000 per month in out-of-pocket living expenses 

Understand what you can afford

Another key aspect of finding the right house hack is understanding how much you can afford. Getting connected to a great lender or mortgage broker early on in the process is very important. You can find some great mortgage lenders here.

This will allow you to understand what purchase price you can go up to, know how much cash you will have to bring to the closing table, and give you an estimate of your monthly payment. 

A good lender will be responsive, able to answer your questions, pull numbers, and generate estimates for you quickly. Many people feel obligated to work with the first lender they talk to, but you have the freedom to work with whoever is best for you. 

To find the right financing, it’s good practice to talk with at least three different lenders. Make introductions, see what their rates and services are, and make a decision from there. Other real estate investors and your real estate agent should be able to point you toward good lenders as well. If you find yourself working with a lender who becomes unresponsive, cannot get numbers, and doesn’t understand your goals, Ariana Grande your way out of that relationship, “thank you, next.” 

Have a lender in place so you can know how much you can afford, what you will have to bring to closing, and how much your monthly mortgage payments will be. 

Get a house hacking/investor-friendly agent

Finding a great real estate agent early in the process will also be key to helping you find the right home. A good agent will be able to curate a home search based on your goals, specifically for house hacking. 

An agent will be able to provide an overview of how each home will perform when rooms are rented out and give you an estimate of your bottom line for monthly income and expenses.

If you’re looking for a great investor-friendly agent that can help you buy a house hack or any other investment property, check out Agent Finder!

A good investor-friendly agent doesn’t need direct experience with house hacking, but it certainly helps. Providing insight on finding the right property, creating leases, marketing your property, and understanding if the property is an excellent long-term investment are all invaluable. 

Many agents do not understand the concept of house hacking. Here are some signs that you may not have a house-hacking-friendly agent:

  • They ask if you want to see homes that don’t meet your goals
  • They cannot tell you how a home will perform as a house hack
  • They do not have access to or won’t find house hack resources for you, such as pro formas, rent comps, or leases
  • Unresponsive or not willing to see houses you’re interested in (that’s just a bad agent in general)

Know your projected rent

To know if a property will perform as a good rent-by-the-room house hack, you must have a good idea of what the rooms will rent for when purchasing the home. As we mentioned above, your agent should be able to help you with this, but you will be the one paying the mortgage and collecting rent, so it’s good practice to have a working knowledge of rent projections yourself. 

Once you find a potential property, check popular rooms-for-rent platforms such as HotPads, Roomster, and Craigslist. Use Facebook to see what people are posting in rental and roommate groups.

As much as you can, you want to compare properties that are as close in proximity as possible and similar in quality, amenities, and size. Finding 3-5 comparable properties close to yours and taking the average room rental rates would be a great way to project rent.

Another way to get comps would be to look at what similar properties rent for a whole house. You can divide the total rent by the number of bedrooms to see what renters would be willing to pay per room. Using this method will also allow you to incorporate rental projection software such as BiggerPockets’ Rent Estimator

After collecting some rent projections, you can check them with your agent. Getting other eyes on rent comps can be helpful to hone in your projection skills and ensure you are not missing the mark. Getting the opinion of a seasoned investor or a property manager would also be beneficial.

Create home searches 

You are not the only one looking for these kinds of homes. Properties with multiple bedrooms will attract other house hackers and families looking for homes that also suit their needs. Creating automated home searches in your target areas with criteria such as “four bedrooms, two bathrooms” and getting consistent lists of homes is a great way to keep your eye on the market.

You’ll want to coordinate this with your agent, as they have the most up-to-date market information.

Buying The Home

If you are new to this, you may be exploring this strategy because you don’t have as much capital or income as you would like, and that’s okay! House hacking is an excellent place to start! To supercharge the house hacking strategy, get in as cheaply as possible. Here are a couple of ideas to utilize.

Down payment assistance

There are many national, state, and local programs for getting down payment assistance and grants to help people buy homes. Some are specific to first-time homeowners—some are based on your area’s demographics or your income.

I utilized a downpayment assistance program to buy my first home. They supplied a second loan that covered 5% of my down payment, and I had minimal remaining closing costs to get into the house. I’ve helped others utilize grant programs that pay up to $17,500 of the down payment and closing costs, all of which never have to be repaid. Some programs offer a 0% down payment as well.

Overall, explore your options before spending more money than you need to.


With the market cooling with rising rates, buyers have more opportunities to negotiate with sellers. You may find a property in an area you like with some cosmetic or maintenance needs. You can get under contract and negotiate repairs or money towards your closing costs to offset the costs of those items. When I was searching for my second home, I targeted homes that had sat on the market a little longer than usual and then asked the sellers to pay my closing costs in my initial offer. I eventually struck a deal and saved thousands at closing. 

If saving cash is a priority for you, let your agent know, and they should be able to help you create negotiation strategies to help get you into a home for the least money down. 

Find an Agent in Minutes

Match with an investor-friendly real estate agent who can help you find, analyze, and close your next deal.

  • Streamline your search.
  • Tap into a trusted network.
  • Leverage market and strategy expertise.

find an investment-friendly real estate agent

Buy turnkey

Many buyers are immediately attracted to the cheapest homes in their target area. Upon viewing the home, they see that there is a lot of maintenance and cosmetic work that needs to be done. Buyers not looking to spend a ton of money don’t always realize how quickly home renovations can add up. The purchase price may be lower, but you must know if you have the funds to renovate the home to your standards. 

If you are looking to house hack, a great option is to look for turnkey properties. Turnkey properties need little to no maintenance or cosmetic work. You simply move in, rent out the rooms, and start making money. Obviously, this saves time and is less stressful, but this method can actually save you money because it takes the least amount of set-up costs and allows you to start making rental income as soon as possible.

Marketing Your Rooms

You have made your goals, identified, and purchased a property. Now you need to find roommates! 

Below, I’ll outline some methods to market your rooms and fill them as quickly as possible. 

Your network

Many people skip this route and go straight to listing platforms and roommate groups, but leveraging your network is a great way to find roommates. 

Create a simple description of the property, available rooms, price, roommate responsibilities, and home pictures. From there, share this with everyone you know in your area and ask them to pass it along to people who may be interested. 

You can post the same description and photos on social media and ask your connections to share on their platforms as well. This is a great way to get potential roommates who are in your sphere of influence rather than just complete strangers. 

Roommate network platforms and groups

Over the past few years, there have been a host of new roommate networking websites and apps. In addition, many people network through social media groups to find roommates as well. 

Network platforms such as Roomster,, and Roomies allow users to create a profile and display their bio, areas of interest, and available budget for a room or a shared lease. These sites will enable you to reach out to these potential roommates. 

Many people also utilize social media sites and join roommate groups on Facebook. These are generally more regional or city-specific and allow someone to share a little about themself, their budget, and what area they are interested in. 

Once you find potential fits, you can carry on conversations with platform messengers and exchange information. You also can search for roommates based on shared interests.

Listing your rooms

While the first two options above give you more control over who sees your property, you ultimately have to get the rooms filled to maximize your house hack, so listing your property is another great way to find roommates. 

HotPads, Facebook Marketplace, and Craigslist are popular room-for-rent listing platforms. A good description of your property and high-quality photos will take any listing from selling a home, an Airbnb, or, in this case, a room for rent, to the next level and get you in front of the most possible tenants. 

Create An Application and Lease Agreement 

Now that you know how to market your property and identify roommates, your next step is to have them complete an application and sign a lease agreement. It’s a common temptation for house hackers to operate in a much more informal manner as opposed to a regular rental property because you will live with these tenants. You may even be good friends with them. 

That’s fine until you find yourself with late payments or a vacated room. Creating some sort of application process and lease agreement to protect yourself can save you trouble if things go south with your tenants. 

Listing sites like HotPads and Roomies have built-in screening options, such as credit, background, and ID checks (these usually require a fee). BiggerPockets also has tenant screening tools.

Lease agreements are crucial to have in place as you house hack. You need protection from damage to your home, missed rent payments, someone moving out unexpectedly, or someone not following your house rules. Seeking the counsel of an attorney is recommended when you have questions about the efficacy of a lease agreement. 

Another good practice is to go over the lease agreement in detail with applicants. Having this conversation will save you and your roommates both from potential misunderstandings.

Screen your roommates, have them sign the lease, collect deposits and the first month’s rent. Congrats, you’re a house hacker! 


Incorporating this house hacking strategy will help you achieve your goals and get you closer to financial freedom or whatever you determined to be your “why.”

House hacking works. That’s why so many people love to talk about this strategy. I hope this guide serves you if you decide to take the leap. 

Put Your House to Work

Discover why so many successful investors use the house hacking strategy—and learn from a frugality expert who has “hacked” his way toward financial freedom. Serial house hacker Craig Curelop lays out the in-depth details to make your first (or next) house hack a huge success.

house hacking strategy book cover

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Research Archive

Compare listings