House Tax Hacking: How to Pay Less & Make More!

What is House Hacking?

So, what exactly is house hacking?

It’s like getting free guac AND queso—except your guac is a house, and someone else is paying your mortgage. It’s basically real estate sorcery.

Here’s the deal: buy a 2-to-4-unit property, live in one unit, and rent out the others. Boom—you’re both a homeowner AND a real estate investor.

My buddy Mike bought a triplex. He lived in one unit, rented out the other two, and guess what?

His tenants covered his entire mortgage.
He had extra cash left over—enough to fly to the Bahamas every other month.

Meanwhile, my other friend Dave? He bought a fancy condo, and instead of sipping margaritas in the sun, he’s stressing over his HOA fees.

Who do you think made the smarter move?

The Tax Perks of House Hacking

Let’s talk tax perks—because who doesn’t love free money from the IRS?

House hacking tax benefits:

Mortgage Interest Deduction – Deduct interest on up to $750,000 of mortgage debt.
Property Tax Deduction – Deduct up to $10,000 in property taxes. And guess what? The rental portion isn’t even included in that cap! (Meanwhile, Dave’s HOA assessment? Yeah, not deductible—ouch).
Depreciation – Write off 27.5 years of “wear and tear” on the rental portion of your home—even if your place is in perfect shape.
Repairs & Maintenance – Fixing stuff for tenants? Deductible.

I knew a guy who threw a taco party to celebrate his massive tax deductions.

Then his tenants crashed the party… and complained about rent increases.

Awkward.

Primary Residence vs. Second Home vs. Investment Property

Alright, time for some real estate clarity. What’s the difference between a primary residence, a second home, and an investment property? Because, trust me, the IRS is watching.

Primary Residence – You live here most of the year (driver’s license, voter registration, and utility bills match).
Second Home – You own another property, but if you rent it out too often, the IRS magically turns it into an investment property.
Investment Property – You rent it out for cash flow, but mortgage rates are higher because no homeowner subsidies for you!

My cousin thought he could sneak his ‘vacation home’ onto Airbnb every weekend.

The IRS disagreed.

Now, he’s stuck with a tax bill bigger than his mortgage.

Getting the Right Mortgage for House Hacking

Now, let’s talk financing. Because picking the right mortgage is the difference between winning big or crying into your bank statements.

Mortgage Options:

FHA Loans – Just 3.5% down, but you must live in the property for a year. Great for first-timers, but not the best for maximizing tax perks.
Conventional Loans – 5-20% down, but with better rates and tax benefits. If you can afford it, this is your best bet.
VA Loans – If you’re a veteran—thank you for your service! You get zero down, great rates, and no PMI. House hacking on cheat mode.

My friend Jason used a conventional loan to buy a duplex.

By year two, his rental income covered his mortgage, and he was ready to buy his next property.

Meanwhile, my other friend? Still renting. Still broke.

Selling & Common Mistakes

So, you’ve hacked your way into homeownership, saved a ton in taxes, and raked in rent money. What’s next?

Capital Gains Tax Exclusion – Live in the property 2 out of 5 years, and you can exclude up to $250,000 ($500,000 if married) in profits from taxes.
Depreciation Recapture – If you claimed depreciation, the IRS wants a cut when you sell. Plan accordingly!

My friend Maria moved out too early and got slapped with a huge tax bill when she sold her house.

Her neighbor? Waited six extra months—and walked away completely tax-free.

Conclusion

Alright, folks, that’s a wrap! Now you know exactly how to hack your way into homeownership and real estate investing—at the same time.

And here’s the ultimate pro tip—if you want the best house-hacking expert in South Florida, reach out to Elena Stazhkova.

She’ll find you the best property.
Help you rent it out to great tenants.
Make sure they pay on time (and don’t throw surprise taco parties).

Email Elena at elena@stazhkova.com
Or text her at +1 (305) 433-3385—she’ll call you back ASAP!