The Honest Pros and Cons of House Hacking

I talk about house hacking constantly — it's how I started building my own rental portfolio here in Central Iowa. But I'd be doing you a disservice if I only showed you the upside. So here are my top five pros and my five biggest cons, straight from living it.

Quick refresher first: house hacking is when you purchase a property — a single-family home, townhome, duplex, triplex, or fourplex — live in it, and rent out the other bedrooms or units. The repeatable version is buying a new property every year or two, renting out the space you were previously living in each time you move.

The Pros

1. Rental Income

This is the biggest advantage. While you're living in the property, your tenants are paying that mortgage for you — including expenses, whether you're splitting utilities or everything is metered separately. Your housing costs drop substantially. Depending on the property, some people cash flow from day one. And everyone's goals differ: some just want part of their mortgage covered, others are chasing full cash flow with extra at the end of the month. Both are wins.

2. Appreciation

Historically, home prices have gone up over time. So on top of the rental income, the property itself can grow in value while you own it.

3. Tax Advantages

From the day tenants move in and start paying rent, you become eligible for meaningful tax deductions — mortgage interest, property taxes, repairs, maintenance. And down the road, if you move out and it becomes a sole rental property, depreciation can offset your taxable rental income. (How the deductions split while you still live there is its own topic — I cover it in the top 5 rules of house hacking. Consult your CPA either way.)

4. Lower Housing Costs — Even With a Low Down Payment

Here's why this matters especially for first-time buyers: when you purchase with a low down payment — FHA at 3.5%, conventional at 5% — your loan amount is higher, so your monthly payment is higher than it would be at 20% down. Renting out the other bedrooms or units offsets that higher payment. It's what makes buying with little money down actually workable — and if your mind is already racing about what happens when you repeat the process over and over, that's the right instinct.

5. Control Over the Property Management

You live there and you own it, so you're the landlord. You decide who lives there, you set the rental rates, and you manage repairs and maintenance. You end up knowing everything going on with that property — which pays off enormously when you move out, convert it to a full rental, and do this again.

The Cons

1. The Responsibility of Being a Landlord

"I'm just going to tell you — being a landlord is not sexy. But keep in the back of your mind: this is the easiest entry into owning rental property."

Finding tenants, screening tenants, collecting rent, managing repairs — it's real work. If you look at those responsibilities honestly and decide it's not for you, that is completely fine. But go in with eyes open.

2. The Expenses

The rental income is a huge pro, but owning property comes with real costs: the mortgage payment, property taxes, insurance, maintenance, and repairs. Factor every one of these in when you're evaluating your first house hack — or your second, or third.

3. Dealing With Tenants

I hope you never have a late payment or an eviction, but nothing is ever perfect. Late rent, complaints, even complaints about the rent payments themselves — it's all possible. The good news: you choose who your tenants are. Screening well up front prevents most of this.

4. Less Privacy

Your tenants may not be in the same bedroom as you, but you're under the same roof. That closeness can cause friction. The best prevention is setting expectations during screening — quiet hours, shared spaces, house norms — before anyone signs a lease.

5. Legal Responsibility

Owning a rental — even one you live in — comes with legal obligations that vary by state. You have to comply with rental laws and regulations, follow Fair Housing requirements when screening tenants, and maintain safe living conditions. If something breaks, repair it ASAP; fast repairs also eliminate a lot of the complaints from con #3. Understand these responsibilities before you buy, not after.

So Is House Hacking Right for You?

Don't let any single pro or con be the end-all-be-all. It ultimately depends on your values, your plans for the property, and what you want your house hacking journey to look like. For me, the math and the long-term wealth building have been worth every un-sexy landlord moment — my honest take is that the pros compound for decades while most of the cons are manageable with good screening and good systems.

If the pros have you leaning in, the next reads are how to start with $5,000 and which property type to purchase. The full framework lives in the Central Iowa house hacking guide.

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 "The Pros & Cons of House Hacking." It is not lending, tax, or legal advice; consult your lender, CPA, or attorney for your specific situation.