How to read this result
In the default example, gross monthly housing cost is $3,800.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Add the monthly housing payment, owner-paid costs and maintenance reserve. Subtract rental income for net monthly housing cost. The rental income share of gross housing cost is the housing-cost offset.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Monthly housing payment (USD/month)
- User-entered mortgage/PITIA or housing payment; not calculated. Minimum: 0.
- Owner-paid monthly costs (USD/month)
- Utilities, HOA and similar costs. Minimum: 0.
- Monthly maintenance reserve (USD/month)
- Maintenance/capital reserve assumption. Minimum: 0.
- Monthly rental income (USD/month)
- Rent collected from other rooms/units. Minimum: 0.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Monthly housing payment | $3,200.00 |
| Owner-paid monthly costs | $300.00 |
| Monthly maintenance reserve | $300.00 |
| Monthly rental income | $2,500.00 |
| Item | Default scenario |
|---|---|
| Gross monthly housing cost | $3,800.00 |
| Net monthly housing cost | $1,300.00 |
| Housing cost offset | 65.79% |
Assumptions and limitations
Does not calculate mortgage eligibility, taxes or local rental legality.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
Use actual achievable rental income and a reserve rather than assuming every room is continuously occupied. The housing payment is an input, not a loan calculation.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- IRS — Publication 527 (2025), Residential Rental PropertyRental income and expense concepts; operating/rental expense context.
Frequently asked questions
Can house hacking produce a negative housing cost?
Yes. Rental income can exceed entered monthly housing costs. The result describes this scenario and does not account for every possible expense or tax.
What does a 65.79% offset mean?
Entered rent covers 65.79% of the gross monthly housing cost. It is a cost offset, not an investment yield.