How to House Hack in Australia and Save Money on Housing

The cost of housing in Australia is on the rise. In the major cities, it is becoming increasingly difficult for young people and families to afford to buy a home. One way to save money on housing is to house hack.

What is house hacking?

House hacking is a real estate investment strategy where you buy a property and then rent out part of the property to generate income. This income can be used to offset your mortgage payments, making it possible to live in a more expensive area than you would otherwise be able to afford.

How house hacking works

There are many different ways to house hack. One common way is to buy a multifamily property, such as a duplex or triplex. You can then live in one unit and rent out the others. This is a great option for people who want to live in a central location, as multifamily properties are often located in desirable areas.

Another way to house hack is to buy a single-family home with a finished basement or attic. You can then rent out the basement or attic to generate income. This is a good option for people who want to live in a more suburban area.

No matter which method you choose, the key to successful house hacking is to choose a property that is in a desirable location and that has the potential to generate enough income to offset your mortgage payments.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Pros and cons of house hacking

As with any investment strategy, house hacking has its benefits and drawbacks. Let’s explore the pros and cons of house hacking, providing a balanced perspective for Australian expatriates and foreign buyers.

The pros: Why house hacking makes sense​​

Cutting down living expenses

House hacking allows you to drastically reduce or even eliminate your housing expenses. By renting out part of your property, you can offset your mortgage payments. It’s like living for free while building equity in a property.

Cash flow

If you manage to secure a good deal and rent out your units at a competitive rate, house hacking can provide a steady stream of passive income. This cash flow can be used to cover your mortgage, property expenses, or be reinvested.

Real estate experience

House hacking is an excellent stepping-stone into the world of real estate investing. You’ll gain firsthand experience in property management, tenant relations, and real estate financing – valuable skills that can be applied to future investments.

Property appreciation

Over time, your property can appreciate in value, increasing your net worth. This appreciation combined with the equity you’re building can create a substantial return on your investment.

The Cons: What to consider before house hacking


When you house hack, you become a landlord, which comes with responsibilities. You’ll have to handle property maintenance, tenant complaints, and potential vacancies.


Your privacy might be compromised if you live on the same property as your tenants. This might not be an issue for everyone, but it’s something to consider.

Upfront costs

There can be significant upfront costs involved in buying a property suitable for house hacking. These could include a down payment, closing costs, and potential renovation costs to make the property tenant-ready.

Market risks

As with any real estate investment, house hacking comes with market risks. Property values can fluctuate, and there can be periods of low rental demand.

While house hacking presents an incredible opportunity for passive income and financial freedom, it also comes with its share of challenges. Whether the pros outweigh the cons will depend on your personal circumstances, financial goals, and risk tolerance. As an Australian expat or foreign buyer looking to explore house hacking in Australia, it’s crucial to understand both sides of the coin.

House Hacking: A Profitable Investment Strategy for Australian Expats and Foreign Buyers?

The answer, generally, is yes – provided that you make smart decisions about the property you buy and how you manage it. Many people have successfully used house hacking to reduce their living expenses and generate passive income.

The profitability of a house hacking strategy depends on several factors. Key among these are the property’s purchase price, the rental income it can generate, the cost of any needed repairs or improvements, and ongoing maintenance and management costs.

Purchase Price vs Rental Income

Your profit margins largely depend on the ratio between your property’s purchase price and the potential rental income. If the rental income can cover your mortgage payments and other expenses, you’re essentially living for free. Any income beyond your expenses can be pocketed as profit.

Appreciation and Equity

Over time, the value of your property may increase, leading to appreciation. As you pay down your mortgage, you also build equity in the property. These two factors combined can lead to significant profits when you decide to sell the property.

Tax Benefits

There are potential tax benefits associated with house hacking. Rental income is taxable, but you can deduct associated expenses, like mortgage interest, property taxes, insurance, maintenance, and depreciation. This can significantly increase your profits.

Is House Hacking Legal in Australia?

Yes, house hacking is legal in Australia. There are no laws that specifically prohibit it. However, there are some restrictions that you need to be aware of.

For example, in some areas, you may need to get a permit from your local council before you can rent out part of your home. You may also need to comply with certain zoning regulations.

House Hacking for Australian Expats and Foreign Buyers

For Australian expats and foreign buyers, house hacking can be a particularly appealing way to enter the Australian real estate market. The potential for profit, coupled with the benefits of having a home base in Australia, makes it an investment strategy worth considering.

Are you ready to dive into the world of house hacking? With the right guidance and careful planning, you can unlock the potential profits of this unique real estate investment strategy. 

Contact Odin Mortgage today to schedule a consultation.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Frequently asked questions

There are many benefits to house hacking. Some of the most common benefits include:

  • Saving money on housing costs
  • Building equity in your property
  • Learning about property management
  • Networking with other investors

There are a few risks associated with house hacking. Some of the most common risks include:

  • Finding tenants who are reliable and pay rent on time
  • Dealing with repairs and maintenance
  • Managing your tenants’ expectations

House hacking is not right for everyone. If you are not comfortable being a landlord or if you do not have the time or resources to manage a property, then house hacking may not be the right option for you. However, if you are looking for a way to save money on housing and build equity in your property, then house hacking may be a good option for you.

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