House hacking is a real estate strategy where an individual or investor purchases a property with the intention of living in one portion of it while renting out the remaining units or bedrooms to generate rental income. It is a creative way to offset housing expenses and potentially build wealth through real estate.

The concept of house hacking typically involves buying a property that has multiple units, such as a duplex, triplex, or multi-unit apartment building. The owner occupies one of the units as their primary residence and rents out the other units to tenants. The rental income from the additional units helps cover the mortgage, taxes, and other expenses associated with the property.

House hacking can also involve renting out individual rooms in a single-family home. In this scenario, the owner lives in one room and rents out the remaining rooms to tenants. This approach is often seen in high-demand rental markets or areas with a large student population.

The benefits of house hacking include:

Income generation: House hacking allows you to generate rental income that can help offset your housing expenses or even cover the entire mortgage payment.

Reduced housing costs: By renting out the extra units or rooms, you can significantly reduce your own housing costs or potentially live for free.

Real estate investment: House hacking provides an opportunity to invest in real estate with less financial strain. The rental income can contribute to building equity and wealth over time.

Experience and knowledge: House hacking can be a valuable learning experience for first-time real estate investors. It allows you to gain hands-on experience in managing rental properties while living on-site.

Flexibility: House hacking gives you the flexibility to choose your neighbors or tenants, manage the property according to your preferences, and potentially expand your real estate portfolio in the future.

It's important to note that house hacking may have specific legal requirements and restrictions depending on local laws and regulations. It's advisable to research and understand the rules and regulations in your area before engaging in house hacking.