Overview of How Much Should a House Hack Make in 2027? (Rookie Reply)
In this BiggerPockets Real Estate Rookie episode, Ashley Kehr and Tony J. Robinson answer three common beginner questions about house hacking and deal analysis in today’s higher-rate, higher-price environment. The core message: a “good” deal is not just about immediate cash flow, and house hacking can still make sense even if it doesn’t fully cover the mortgage—as long as it reduces your housing costs, builds equity, and fits your long-term goals.
Main Topics Covered
1) House hacking in expensive markets
- A listener in Portland worried that house hacking no longer works because duplex prices are high and rent only covers part of the mortgage.
- Tony and Ashley said house hacking is not dead—it just needs to be redefined.
- A “successful” house hack may mean:
- lowering your living expenses,
- paying your own mortgage instead of a landlord’s,
- building equity and getting tax benefits,
- and creating future upside through appreciation or rent growth.
2) What “break even” actually means
- The hosts explained that investors often use “break even” loosely.
- Their definition of true break even includes all expenses, not just principal, interest, taxes, and insurance.
- A proper break-even calculation should include:
- repairs and maintenance,
- capital expenditures,
- utilities,
- lawn care or property services,
- and any other fixed or variable costs.
- They recommended using the BiggerPockets calculators to avoid missing expenses and to analyze deals more accurately.
3) Realistic return expectations for a first house hack
- A Pittsburgh investor asked what return targets make sense for an FHA multifamily house hack in the current market.
- The hosts emphasized that return expectations vary by market.
- A 10% cash-on-cash return may be realistic in one city but not in another.
- They encouraged investors to:
- define their own goals first,
- compare the property to other uses for that capital,
- consider time, hassle, and management burden,
- and account for tax advantages and long-term value creation.
Key Takeaways
- House hacking is still valuable even if it does not produce strong immediate cash flow.
- A good deal should be measured against your real alternative—usually renting or buying a different property.
- Break even means net income of zero after all costs, not just mortgage coverage.
- If you want stronger returns, look for ways to increase revenue, such as:
- renting by the room,
- midterm rentals,
- short-term rentals,
- furnishing units,
- or adding value through renovations.
- For house hacks, a property can be acceptable even if it is not perfect on day one—especially if you plan to improve it and later move out into a stronger rental.
Practical Advice for Rookie Investors
For house hackers
- Compare your projected monthly cost to what you would pay to rent a similar place.
- Look for opportunities to boost income from both the unit you live in and the rental side.
- If you plan to renovate, living in the property can reduce your total out-of-pocket costs.
For deal analysis
- Don’t rely on rough estimates.
- Include reserves and all operating expenses.
- Use a calculator or spreadsheet that forces you to account for the full cost of ownership.
For return expectations
- Don’t chase a national “ideal” return number.
- Set your own minimums based on:
- market conditions,
- your personal goals,
- opportunity cost,
- and how much work the property will require.
Bottom Line
The episode argues that beginner investors should stop asking, “Does this deal cash flow perfectly today?” and start asking, “Does this property improve my situation overall?” For house hacking especially, a deal can still be a win if it lowers your housing burden, creates equity, and positions you for better returns later.