Have you ever dreamed of owning your own home but thought it was too expensive or out of reach? You’re not alone.
In cities like Delhi, Mumbai, Bangalore, and even growing areas like Noida and Gurgaon, buying a home can seem like an impossible goal—especially if you’re in your early 20s or 30s, working a salaried job, and paying rent month after month.
But recently, I came across a concept that completely changed the way I think about real estate.
It’s called house hacking.
And no, it’s not illegal or obscure. It’s a smart way to buy a home and use it to generate income—making your monthly mortgage payments feel less like a burden and more like an investment in your future.
Let me break it down for you in simple terms.
The Usual Struggle: High EMIs, Low Savings
Most of us either live in a rented house or dream of owning our own home one day.
But here's the problem: if you pay ₹25,000 per month in rent and you try to buy a house, your EMI (home loan installment) could be ₹50,000 or more. It feels like a double burden.
So naturally, many people delay buying a house, thinking that they will save more and buy "one day".
But what if you could live in your own home and reduce your monthly EMI - almost to the same amount you are paying as rent?
Enter House Hacking
The idea behind house hacking is simple:
You buy a house that is slightly larger than you need, and rent out the extra space to cover a large portion of your EMI.
Doesn't sound like much to be honest? Let's look at a real-life example.
The Scenario
Let’s say you are a 28-year-old software engineer who works remotely. You earn around ₹20 lakh per year and have managed to save around ₹17-18 lakh in the last few years by living frugally and investing wisely.
You currently rent a 1 BHK apartment, which costs ₹25,000 per month.
One day, while browsing real estate listings, you come across a 2 BHK ready-to-move-in apartment in Noida for ₹85 lakh. The metro is just 800 meters away, and the area is well-developed.
You wonder: “Can I really afford this?”
Let’s briefly discuss the numbers.
The Numbers
- Property Price: ₹85,00,000
- Down Payment (20%): ₹17,00,000
- Home Loan (80%): ₹68,00,000
- Loan Tenure: 25 years
- Interest Rate: 8.5%
- Monthly EMI: ₹54,755
At first glance, this looks like a terrible deal.
Why would you go from ₹25,000 rent to nearly ₹55,000 EMI?
That’s where house hacking comes in.
How to Make the House Pay for Itself
The trick is in how you use the space.
Let’s say your new 2BHK has:
- A living room with access to a guest washroom
- Two bedrooms, one with an attached bathroom
- A shared kitchen
Instead of keeping the whole flat to yourself, you turn it into a small co-living space.
Here’s the plan:
- You live in one bedroom
- You rent out the living room + guest washroom to one bachelor for ₹12,000/month
- You rent out the second bedroom with attached bath to another bachelor for ₹12,000/month
Total rental income: ₹24,000/month
Even if you consider some tax or utility sharing, you’re still getting ₹20,000+ every month.
Now your effective EMI becomes ₹55,000 - ₹24,000 = ₹31,000
So compared to the ₹25,000 you were paying on rent earlier, you’re only paying ₹6,000 more each month—but now you’re living in your own home.
But Wait, There’s More
This isn’t just about saving ₹6,000.
You’re actually building wealth in multiple ways:
1. Capital Repayment (Forced Savings)
Each EMI payment reduces the principal of your loan. For example, in your first year, you can repay ₹80,000 of principal. It's like you're automatically saving ₹80,000 without even thinking about it.
2. Property Appreciation
Let's say your property value increases by 6% every year. That's an appreciation of ₹5.1 lakh in the first year alone. Over 5-10 years, it can be a huge amount.
3. Tax Benefits
You can get tax deductions on home loan interest and principal under sections 24(b) and 80C of the Income Tax Act.
Put all this together, your ₹17 lakh down payment will look like a smart investment, not a risky bet.
Returns on Paper
Let’s calculate total first-year benefit:
₹80,000 principal paid (forced saving)
₹5,10,000 property appreciation
₹72,000 extra cost over rent (₹6,000 x 12)
Net gain = ₹80K + ₹5.1L - ₹72K = ₹5.18 lakhs
On an initial investment of ₹17L, that’s 30.5% ROI in Year 1.
In the second year, your principal repayment increases, your appreciation is on a larger base, and your return could be even higher—around 32% or more.
Is There a Catch?
Of course, this isn’t without risks.
- You’ll need good, trustworthy tenants
- You must be okay with sharing your home
- Property prices can fluctuate—no guarantee of 6% annual growth
- Maintenance and repair costs can eat into profits
- Loan interest rates can change
Conclusion
House hacking might not be for everyone, but it’s an incredibly clever strategy for:
- First-time homebuyers
- Young professionals
- People working remote jobs
- Anyone looking to turn liabilities into assets
It turns your home from a monthly expense into a long-term investment—and can help you get on the property ladder years earlier than you think.
So, if you’re sitting on savings and wondering if it’s time to buy a home, this idea might be worth exploring.
Because sometimes, the smartest hacks aren’t found in books or podcasts—they come from real people doing real work, quietly changing their lives.
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Finance