1. The building and the loan
2. Rents and running costs
3. Your plan
Enter your numbers, or load the example, then click Calculate.
Result
First month, line by line
| Item | Per month |
|---|
Year by year
| Year | Living there? | Rent collected | Costs | Property cash flow | Better than renting by | Loan balance | Equity |
|---|
What if it goes worse? (first-year monthly cost after rent)
| Scenario | You pay per month |
|---|
How it works, and what it leaves out
- FHA loan = price × (1 − down payment) plus the 1.75% upfront mortgage insurance premium, which is financed. Annual mortgage insurance is charged monthly on the balance at the rate for your loan size and down payment.
- Conventional PMI is estimated from loan-to-value (or use your own quote) and stops when the balance reaches 80% of the purchase price.
- Your cost after rent = payment + mortgage insurance + tax + insurance + utilities + HOA + repairs reserve + management, minus rent collected after vacancy. The unit you live in earns nothing until you move out.
- Better than renting: while you live there, the rent you avoid counts in your favour; after you move out you pay rent elsewhere, so only the property's own cash flow counts. The sale adds the price after selling costs minus the loan.
- Annual return is the internal rate of return on cash to close. It is magnified by the tiny down payment, which also magnifies losses.
- Not modelled: income tax and depreciation, county loan limits, rent control, major repairs, refinancing, lender-specific rules. Expenses grow at 3% a year. Rates and rules change; confirm them with a lender.
Common questions
What is house hacking?
House hacking means buying a small multi-unit building (a duplex, triplex or fourplex), living in one unit and renting the others, so the tenants' rent pays most or all of your mortgage and costs. Because you will live there, you can use owner-occupied financing with a much smaller down payment than an investor loan.
How much down payment does a house hack need?
An FHA loan allows as little as 3.5% down on a 1-4 unit home you will live in, and some conventional loans allow 3% to 5%. You also pay closing costs, usually 2-5% of the price. This tool shows the cash to close and the FHA upfront premium, which is added to the loan rather than paid in cash.
What is the FHA self-sufficiency test?
On a 3- or 4-unit FHA purchase, lenders require that 75% of the rent from all units, including the one you will live in, covers the full monthly payment (principal, interest, taxes, insurance and mortgage insurance). A 2-unit purchase does not have this test, but many lenders still count about 75% of the other unit's rent toward your qualifying income.
Do I have to live there?
Yes. FHA and other owner-occupied loans expect you to move in within about 60 days and live there for at least a year. After that many owners move out and rent their own unit too, which is the second phase this tool models.
How does the return compare to renting?
Each year the tool compares your cash position with what renting a place yourself would have cost, then adds the sale proceeds (after selling costs) at the end. The annual return is the internal rate of return on the cash you put in. A small down payment makes this number look large, so the tool also shows a flat-prices stress case.
What does it leave out?
Income taxes and depreciation, the cost of a bad tenant or a long vacancy beyond the percentage you enter, big repairs beyond your maintenance reserve, rent control, local limits on rent, refinancing, and county FHA loan limits. Mortgage insurance rates, loan limits and lender rules change, so confirm them with a lender.
Is my data uploaded?
No. Everything runs in your browser tab and nothing is sent anywhere. There are no accounts.
Is this financial advice?
No. It is an arithmetic illustration of the numbers you enter, not advice about a loan, a property or an investment. Talk to a lender and a licensed adviser before you buy.