The direct answer
House hacking compares rental income from the shared or partly rented property with the owner’s housing payment, owner-paid costs and maintenance allowance. Income offset is a ratio; net housing cost is the dollars left for the owner to fund.
Build the full monthly housing budget
Include the entered housing payment, owner-paid utilities or other relevant obligations, and a maintenance allowance. The calculator does not calculate the loan payment; that amount is supplied. Specify whether roommates or tenants reimburse particular costs, and keep those reimbursements consistent with the rental-income assumption. An omitted owner cost makes the apparent offset larger without changing real cash needs.
To apply the approach to an editable scenario, use the House Hacking Calculator. For the neighboring question, explore Rental Property Cash Flow Calculator.
Use a collected-income scenario
Scheduled room rents may not equal income received throughout the year. Consider turnover, vacancy and collections before consolidating a monthly rental assumption. If the housing arrangement includes furnished space or services, identify the associated costs. A simple recurring monthly model does not show irregular repairs or the legal treatment of sharing the property.
Read the offset and remaining cost together
An offset of 100% means the entered rental income equals the modeled gross monthly housing cost. More than 100% produces a negative net owner housing cost, representing a surplus under the assumptions. That is not proof that the property is free to own: capital spending, vacancies and other excluded obligations can still require cash.
Worked example
A $3,000 housing payment, $500 owner-paid costs and $300 maintenance reserve total $3,800 monthly. At $2,500 rental income, the owner’s modeled net cost is $1,300. Income offsets 65.79% of the gross budget, not 65.79% of the property price.
Common mistakes and limitations
Do not call the full rent amount profit before subtracting the housing and operating costs. Shared-housing permissions and obligations are outside the arithmetic.
Does not calculate mortgage eligibility, taxes or local rental legality.
Frequently asked questions
Does the offset measure investment return?
No. It compares monthly rental income with monthly housing costs, not with contributed equity or property value.
Can net housing cost be below zero?
Yes, if entered rental income exceeds modeled costs. The surplus is still an assumption-dependent scenario.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- IRS — Publication 527 (2025), Residential Rental PropertyRental income and expense concepts; operating/rental expense context.
Read our editorial policy for the scope of these educational methods.