house hacking a duplex

House Hacking a Duplex: Pros & Cons to Make You Think

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Today we are going to discuss the pros and cons of house hacking a duplex. 

If you are considering owner occupying a duplex, my hope is that this discussion will help you make an educated decision. 

As with anything, the house hacking lifestyle has its benefits and its drawbacks. It might work for you and yours, and it might not.

Let’s take a spin around the ol’ compare ‘n contrast, shall we?

Pros of House Hacking a Duplex


Owning a two family home – if calculated correctly – can be a real benefit to your finances. 

For starters, your 2nd unit will likely be collecting rent, and you can use that money to help pay your mortgage, taxes, or other expenses. 

Example – your monthly home mortgage costs are $1500, and you live on the first floor and rent out the second floor. 

Let’s say the 2nd floor yields $750/month in rent. 

Woohoo!  You just cut your monthly expenses in half.

Tax Incentives

But wait, there’s more!  (Cue the infomercial…)

There are tax incentives – write offs – for rental properties. 

Since an owner occupied duplex is half-rental, you get to play!


Buy some fall flower pots for everyone to enjoy on the shared front stoop?  Super.  50% is tax deductible. 

Wait… what? 

Money you spend that benefits both you and your tenant – say you share a backyard, or front garden, or trash bins – is tax-deductible.  As in, you can write off a portion of them from your taxes. 

For example, if you spent $1000 in a calendar year sprucing up the shared laundry room, then you can “write off” half (as in, your total income is $500 less) due to this business cost.  Pretty cool, right? 

But what if you repair something for the tenant only?  Let’s say you replace a fridge in their unit.  You get to write off the entire expense, since the entire cost was for the tenant’s unit.  So, continuing our example above, instead of a theoretical annual income of $9,000 (12 months x $750 in rent), you now only have an income of $8,200 ($9,000 minus the cost of a really nice fridge).   Sweet.


There’s another tax strategy on rental properties called depreciation that I definitely do not understand.  Let’s turn to people smarter than I at Investopedia for a look at how depreciation of an owner-occupied investment property is beneficial to your finances:

“Depreciation is the process used to deduct the costs of buying and improving a rental property. Rather than taking one large deduction in the year you buy (or improve) the property, depreciation distributes the deduction across the useful life of the property.”

Basically, you get a write-off for just buying and renting out a rental property over the course of 27.5 years. If this magic is particularly interesting to you, I high recommend you read the article over at Investopedia that explains depreciation.


House hacking a duplex is convenient in that your rental unit is right next door.  You can fix stuff same day if you need to – no driving required. 

Need to shovel the rental property’s snow?  Easy, just roll out of bed and bundle up.

Tenant needs help with a clogged drain or window that’s stuck?  Just hop upstairs and off you go. 

You can also keep an eye on things quite easily – smells, sounds, weather events… you get the idea.

We can contrast this with owning a separate rental unit somewhere far away – which, when we get to the “cons” you will see, does have its advantages – where if you needed to shovel snow or help your renter with a drain or window, you’d have to either travel a far distance or hire someone else to do it. 

You Get To Pick Your Neighbors

Don’t want certain things in your neighbors?  You don’t have to pick them. 

Yes, there are important rules against discrimination for things like age or race, but there are also rules in favor of owner occupants. 

Even in New Jersey – one of the most tenant-friendly states in the US of A – owner occupants are allowed to say no to certain applicants, such as those who smoke or have pets.  

There’s a lot more leeway if you are living in your rental property than, say, for a building with 4 or more units, at least in New Jersey.  (Source: Truth in Renting by the State of NJ).


I will never forget a night at work when I was telling a friend about our experience owning a two family house.  He was from a rough neighborhood in Atlanta, and had grown up in a high rise.  He was all smiles as I described that our second unit was rented at the time to a family with three children. 

I thought he’d be mad at me for being an evil capitalist landlord (let’s be real, landlords in big cities don’t have the best reputation) – but he said, “you’re doing such a wonderful thing.  You’re providing a family a place to raise their children in a comfortable house in a nice neighborhood.” 

Well then.  My apprehension abated and I felt all the good juju flowing through my veins with that one. 

I took for granted that I grew up in a house, so I hadn’t really thought of it that way.  He grew up in a giant building – not a home – and saw things differently. 

House hacking a duplex can be rewarding – you’re providing a nice product to someone who wants and needs it, hopefully at a fair cost. 

Cons of House Hacking a Duplex

The stuff you’re all here for. 

The battle stories. 

The jaw-dropping cocktail party anecdotes.

Ha, just kidding, it’s not that bad! But, truly, owning a two family home is not all bunnies and rainbows. 

As Dave Ramsey puts it to a caller inquiring about house hacking a duplex, “the good news is, your renter’s next door. The bad news is… your renter’s next door.”  

Here are a few of the downsides to owner occupying your two family home.


Whatever it is that your tenants do to make noise… you’re probably going to hear it. 

Whether you are sharing a wall in a side-by-side two family house, or you’re sharing a ceiling/floor in a top-bottom, no matter how hard you try, you’ll hear something. 

It might be kids running around playing while you try to catch some Zzzzs (why people let their 5-years-olds stay up past 11pm, I’ll never know…), or other, you know… things that people do… noise is just part of the deal. 

You can mitigate some of this auditory discomfort by installing carpet to absorb sound, but nothing is foolproof. 

We comfort ourselves knowing that we used to live in a 24 unit building when we were renting.  Having only 1 set of neighbors instead of 23 sets of neighbors is a huge step up!

is house hacking worth it
“The space between”… some days it feels distant, others too close!

Tenants Know Where to Find You

We once had a tenant named Pete

Who liked to turn too high his heat

It one time died out.

And with quite the shout

At midnight our door he would beat. 

-an original limerick

This is not about poor Pete, by the way, but do you get my point? 

We truly had a tenant whose heat stopped working one night at 2am, and thought it perfectly appropriate to bang on our door immediately so that we could fix it. 

Unfortunately, our plumber was unavailable, and neither were we.  The issue was resolved by 8am.


This is a tricky one.  This may depend on the type of two-family home you own and how it is laid out. 

Sometimes, sharing a portion of your home can be slightly awkward.  We tend to keep to ourselves and minimize the shared spaces on our property, but you can’t help bumping into people. 

This is why we try to keep our relationship with the 2nd floor a happy one.  

We personally share a laundry space with our tenants, as well as a front door that leads to our separate apartments, so we do see our tenants, like it or not. 

If I am going to see you in my jammies at 8pm when I’m fetching the last basket of clean laundry, I sure as hell better like you, amiright? 


Two family houses don’t boast as much living space as a single family house does.  It’s basically apartment living, unless you and your tenants are inhabiting two separate structures.  

This lifestyle may not be for everybody.  We spent our first four years in our house as one couple (as my dad called us, “DINKs – double income no kids”) with a 3-bedroom apartment. 

Now that we have our kiddo, it does feel a little tighter – but honestly it’s not uncomfortable.  We keep an eye on our “stuff” buildup, declutter regularly, and don’t volunteer to host the extended family Christmas party.  Boom.   

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    Often, multifamily properties come in neighborhoods with lots of multifamily properties. 

    Sometimes they’re in great ‘hoods, sometimes they’re in so-so ‘hoods… and sometimes downright bad ‘hoods. 

    Sometimes you can find neighborhoods with combos – single family and multifamily properties intermixed.  This often is a sign of a “better” neighborhood because single families are more likely to be inhabited by the owners, which will make for a stronger neighborhood, boast pride of homeownership, etc.

    If you’re on the market for a two family house, we recommend you do your research on the property you’re eyeing. 

    Sure, you can look at Trulia and guesstimate the safety of a neighborhood by its crime rates, but it would be better if you drive by at different times of day, visit the local watering hole, take a walk at 9pm on a Friday… see what you see, and see if it’s for you. 

    A two family house can be found in a very nice area – you just need to do your due diligence if that’s important to you. 

    house hacking multifamily
    With neighborhood homes like this one, you can be sure it’s a good ‘hood!


    Higher cost to get started. 

    While multi families arguably don’t fluctuate with a market quite as much as single families do, they can still cost a good bit of money.  As the old adage goes, it takes money to make money. Budgeting to buy a house can be daunting, and purchasing a two family is no different.

    Along with a higher price tag, two family houses also tend to come with…

    Higher property taxes

    Uncle Sam always likes to collect his share, no matter how you choose to earn it. 

    Two family homes are no exception. 

    Depending on your area, you might have a bit more in property tax – however, the rental income should help you offset this cost. 

    Unless you live in New Jersey, where you may need to mortgage a kidney to afford the property taxes up here.  Le sigh.. it’s home. 

    Final Thoughts on House Hacking a Multifamily

    As you have read, there are some advantages and disadvantages of owning a two family home. 

    Owner occupying a rental property isn’t for everybody, but if you can bear it, it can be a rewarding endeavor in multiple ways. 

    We hope these pros and cons will help you understand if owning a house hack is right for you! 

    Don’t forget to subscribe here so you never miss a post about our two family house!

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