Which Property Type Should You House Hack? An Honest Comparison

One question I get from almost every buyer looking to house hack: which property type should I purchase? It's the right question — the property type shapes your cash flow, your privacy, and your day-to-day life for at least a year. So let's walk through the real differences between single-family homes, townhomes, condos, and multi-family properties (duplexes, triplexes, and fourplexes), including what we personally chose and why.

Single-Family Homes

Single-family homes give you space, privacy, and the feel of owning a traditional house. House hacking one usually means renting out extra bedrooms to tenants — unless the property has an ADU (accessory dwelling unit — a livable, detached structure) or a separate building you can rent out.

The trade-off to know going in: cash flow potential may be limited until you move out and rent the entire property. That's not a dealbreaker — it's just the shape of the strategy with this property type.

Townhomes

Townhomes are the middle ground between a single-family home and a condo. You typically share walls with neighboring units, but you get more privacy than a condo. This is what we do personally, and the reason is low maintenance: the HOA fee takes care of a lot of the upkeep — lawn care, snow removal, trash, and in some cases even the roof and siding. When you're planning to move every year and convert each property to a rental, that hands-off exterior maintenance matters.

Condos

Condos are units within a larger building or complex, often with shared amenities and common spaces — sometimes a pool or a gym. House hacking a condo typically means renting out spare bedrooms, or renting the entire unit once you've moved out after a year.

One critical warning for both condos and townhomes: review the HOA rules before you buy. Some HOAs restrict rentals or don't allow them at all. Don't get stuck owning a property you can't even house hack. (This is one of the first things I check for clients when we're evaluating a property.)

Worth noting: these property types typically appreciate at a higher rate than multi-family properties. The trade-off is you'll likely be renting bedrooms and sharing space with tenants if you want to lower your living costs while you're there — or you can do what we do and simply live in it for a year, then convert it to a rental after you move out. Totally your discretion.

Duplexes, Triplexes, and Fourplexes

Multi-family is where house hacking gets the most straightforward. A duplex is two units in one building — some side-by-side, some "up-down." You live in one unit and rent the other, which means immediate cash flow from day one, since you're collecting rent from the tenant next door. Being close also lets you address issues quickly. Of course, you're living next door to your tenants — that's the honest flip side.

Triplexes and fourplexes work the same way with three or four units. These properties will often cover all of your expenses — or even cash flow — while you're still living there. If you're looking for the highest cash flow potential and you're okay being close to your tenants, multi-family is probably your best fit.

Financing note: owner-occupied conventional loans cover up to four units, which is exactly why 2-4 unit properties are the house-hacking sweet spot. Five or more units is considered commercial in the eyes of the lending community.

So Which One Is "Best"?

Most people would guess a fourplex is the best option financially — and it probably is, because you're getting four rental units for the price of one property. But here's the honest answer, and it's the one I give clients in person too:

"Personally, I don't want to live in the same building as my tenants — and I've found that is completely fine. Just remember: this is your house hacking journey, not mine. The best property type for you will always be the one you find the most value in with your lifestyle and financial situation."

A quick decision framework:

• You value privacy and are fine collecting most of your cash flow after you move out: single-family, townhome, or condo.
• You want immediate cash flow and are open to living near your tenants: duplex, triplex, or fourplex.
• You're not sure: start with a single-family or townhome, get comfortable with the method, then scale up on the next purchase.

I've seen success from friends, clients, and my own experience in every one of these property types. There's no wrong door in — just the wrong door for you.

Your Next Step

Go hop on the search page and look at duplexes, triplexes, and single-family options in your price range — then run the numbers. If you'd like me to run some numbers on those for you, I'd be happy to do so. And if you're still narrowing down where to buy, Ankeny and Ames are two of the strongest house-hacking markets in Central Iowa. Not sure how to spot a good candidate property in the first place? That's covered in 5 tips for finding the perfect house hack.

Jackson Krile is a residential and investment real estate specialist with the Flanders Team at RE/MAX Real Estate Center, serving Central Iowa including Ankeny, Ames, Johnston, Urbandale, Altoona, Waukee, and 20+ surrounding communities. This article is based on Jackson's video "House Hacking: Which Property Type Should You Purchase?" It is not lending, tax, or legal advice; consult your lender, CPA, or attorney for your specific situation.