Can the rent from the other unit pay my whole mortgage?

Sometimes it covers a large part, but add taxes, insurance, utilities, repairs and vacancy before you decide. In the example, rent covered $1,800 of a $3,700 total cost.

Do I have to live in the building?

For owner-occupant loan terms, lenders expect you to. Read your loan's occupancy clause and ask your lender how long.

Are my own unit's costs deductible?

Generally not. Only the rental part of shared costs is a rental expense. Ask your tax preparer.

House Hacking a Duplex: Your Real Monthly Cost

Take the whole building's monthly cost, add what you pay for utilities, repairs and vacancy, and subtract the rent from the other units. What remains is your real housing cost. In the example below, a $3,200 payment and $1,800 of rent leaves you paying $1,900 once the extras are counted, which is less than the payment, but more than the headline number most people quote.

What house hacking means

House hacking is buying a small multi-unit building, living in one unit and renting the rest, so tenants cover part of your housing cost. Lenders treat a home you live in differently from one you only rent out; Fannie Mae separates principal residence, second home and investment property in its occupancy types. The owner-occupant rules are the reason many buyers choose this route, and a lender decides which rules apply.

List every monthly cost, not just the loan

Principal and interest on the loan.
Property taxes and insurance (a landlord policy where required).
Utilities you pay for the building or the shared parts.
A repair reserve, because roofs and water heaters fail on no schedule.
A vacancy allowance, since a unit will sit empty sometimes.

A worked example

Example a made-up duplex. Principal and interest $2,400, taxes and insurance $800, so the loan payment with taxes and insurance is $3,200. Add $150 of utilities you pay, a $200 repair reserve and a $150 vacancy allowance (about one month of the other unit's rent each year). Total monthly cost: $3,200 + $150 + $200 + $150 = $3,700.

Example the other unit rents for $1,800. Your real monthly housing cost is $3,700 minus $1,800, which is $1,900. If renting a comparable place for yourself would cost $1,700, you pay $200 a month more than renting. A part of each payment pays down the loan (say $500 of the $2,400 principal and interest in this made-up case), so the cost to you after counting that equity is lower.

Both versions are honest, as long as you say which one you are quoting. The first is your cash cost; the second counts the loan paydown as something you keep.

Taxes when you live in part of the building

When you rent part of a property and live in the rest, expenses that cover the whole property generally have to be divided between the rental part and your part, and only the rental part is a rental expense. The IRS explains the division in Publication 527. Our post on splitting expenses when you live in one unit shows the bookkeeping. Your tax preparer decides how it shows on your return.

What can go wrong with the numbers

The other unit stays vacant for months and you carry the full payment.
A big repair arrives before the reserve is built.
Your income changes and you can no longer cover the gap.

Test the building by asking whether you could cover the full $3,700 on your own for a few months. If you could not, the plan has little room for a bad stretch.

A simple stress test

Remove the other unit's rent entirely and see if you can pay the full $3,700 for three months.
Double the repair reserve and see how the monthly figure changes.
Raise the vacancy allowance to two months a year and see how the monthly figure changes.

If the plan only works when everything goes right, it is thin. The goal of the calculation is to know your worst reasonable month before you sign, not to prove the deal works. Keep the stress test with your numbers and revisit it each year with real figures from your books. Many owners also keep a cash reserve for the building; see how much reserve to keep. Remember that you are also the landlord to the other tenant: a lease, a deposit held under your state's rules and a separate bank account for the building make the arrangement clean from the first day.

How DoorKeeping fits

DoorKeeping keeps the building's own bank account, rent collected from the other units, and each bill coded to an account, so the real cost above is a read of your books and not a guess. It does not decide your share for tax purposes or give tax advice. It costs $2 per unit per month, and a duplex is two units.

Sources

Fannie Mae Selling Guide, B2-1.1-01 Occupancy Types, read Oct 31, 2026
IRS, Publication 527, Residential Rental Property, read Oct 31, 2026

Questions

Can the rent from the other unit pay my whole mortgage?: Sometimes it covers a large part, but add taxes, insurance, utilities, repairs and vacancy before you decide. In the example, rent covered $1,800 of a $3,700 total cost.
Do I have to live in the building?: For owner-occupant loan terms, lenders expect you to. Read your loan's occupancy clause and ask your lender how long.
Are my own unit's costs deductible?: Generally not. Only the rental part of shared costs is a rental expense. Ask your tax preparer.