Need to Generate Some Extra Income? Your Home May Hold the Keys

Estimated reading time: 8 minutes

Most people think of their home as the place where their money is spent on rent or mortgage payments, maintenance and repairs, insurance, property taxes, etc. Fewer think of it as an income generator. But for a growing number of Americans, their home has become an important source of additional cash flow.

You don’t need to buy a rental property, hire a property manager, or become a full-time landlord to generate income from real estate. In many cases, the opportunity is already sitting inside the home you live in, and it might be a spare bedroom, a driveway, or a patch of yard you never thought twice about.

The strategy has a name: house hacking. It’s been around for decades, went viral during the Covid pandemic, and has since evolved into something more practical and accessible than its social media reputation suggests.

How house hacking became a household word 

The basic idea of house hacking — buying a property, living in part of it, and renting out the rest to offset your costs — isn’t new. Smaller, independent landlords have long known that a duplex or an ADU can make owning a home far more affordable.

In 2013, Brandon Turner, a prominent real estate investing influencer, wrote a blog post for BiggerPockets that outlined how to “hack” your home and get paid to live in it. The premise had mass appeal, because it offered a viable solution to the unaffordable housing crisis. 

The strategy found a devoted following in real estate investing communities throughout the 2010s, but the pandemic era took it to new heights. Historically low mortgage rates along with fast appreciation and rising rents made covering a mortgage payment with rental income genuinely achievable for many buyers. And thanks to content creators with large followings who promoted house hacking, the idea reached people who had never thought about real estate investing before.

When interest rates climbed sharply starting in 2022, however, the math changed, and the conditions that made the pandemic-era version of house hacking so compelling narrowed considerably, turning the fast, outsized returns that social media had promoted into an outcome that was harder to replicate. The house hacking trend has since shifted to a more stable, long-term strategy for improving finances and building wealth. 

Why house hacking still makes sense 

House hacking has stayed relevant because of shifts in the housing market. Home prices rose about 45% between 2020 and mid-2025. During that same period, monthly mortgage costs on the median-priced U.S. home more than doubled, rising from roughly $1,200 to over $2,500. For many, the appeal of house hacking today is simpler than building a portfolio: a few hundred (or even thousand) extra dollars a month makes a meaningful dent in a mortgage. Over time, that income can help you pay down the loan and build equity faster. That opens up more real options to build on that momentum, such as renovating, selling, or buying something else.

House hacking is especially appealing to those trying to enter the homebuying market for the first time. In fact, a 2023 Zillow survey found that 55% of Millennial and 51% of Gen Z homebuyers rated the ability to rent out part of their home as very or extremely important in their purchase decisions, up eight percentage points from previous years and compared to 39% of all homebuyers.

Real estate investor Malika McCalla started house hacking just out of college, when she bought her first home for $155,000 and rented a room to another student while completing her graduate studies. The rental income helped her pay the mortgage, build equity, renovate the property and sell it for a profit. She then used that equity to invest in multifamily properties and scale to five rental doors. “This is one of the best ways to get started in real estate,” she says, “if you are patient and consistent, results will follow.”

Creative ways to rent out property

Traditional approaches to house hacking involve renting out a bedroom, converted garage, finished basement, or ADU in your single family home, or purchasing a small multi-unit property (a duplex, triplex, or fourplex) and living in one unit while renting out the others. These are the most efficient ways to build cash flow quickly, but they aren’t always feasible or desirable options.

If you don’t have the capital to purchase a property, or you simply don’t feel comfortable sharing living spaces with strangers, there are plenty of other ways to rent out property. Think creatively about what you already have that others might need. Even smaller spaces can generate impressive returns. 

Renting out parking spots, garages, or driveways offers steady, low-maintenance income. In big cities like New York, parking spaces average around $400 per month according to Spacer. Rates in smaller cities generally run between $150 and $300.

Storage space rentals are another overlooked opportunity. If you have an unused attic, basement, or shed, you can rent it out for storage. Industry data from SpareFoot shows that the average storage unit rents for about $85–$135 per month nationwide. That means five converted spaces could bring in $400–$700 monthly with minimal investment and management.

Larger or more distinctive properties with expansive yards, gardens, pools, or unique architecture can be in high demand for filming locations, photoshoots, and events. Some venues earn as much as $250–$500 per hour. Even home gyms and pools have found audiences among people who want access to equipment without a gym membership.

Lady Landlords founder Becky Nova, who credits house hacking with launching her investing career, puts it plainly: “It is a fantastic way to tip your toe into being a landlord and is an amazing way to leverage finances to really pick up an asset that generates cash flow, even if you don’t have a lot of capital on hand.”

Practical steps for getting started 

If you’re considering house hacking, here are a few things worth thinking through before you start:

1. Check local regulations: zoning laws, HOA rules, and short-term rental regulations vary widely. Make sure the type of rental you’re considering is permitted in your area before listing anything.
2. Get the numbers right: calculate what you’d realistically earn, factor in any costs (repairs, service fees, taxes), and make sure the income justifies the effort and any upfront investment.
3. Start simple: you don’t need to convert a basement or build an ADU to start. Renting a bedroom or a parking space is a low-friction way to test the model and build confidence before scaling.
4. Use the right tools: property management software makes it easier to run things professionally from the start, which protects both you and your tenants and sets better habits for when you grow. 

Technology makes it more manageable (and more profitable) 

One reason people hesitate to rent out property is the management side: finding tenants, collecting rent, handling repairs. The reality is that property management apps have made most of those tasks much simpler, and the data shows the right tools also make rentals more profitable.

RentRedi’s internal data found that tenants who went through a formal screening process paid rent 17 days faster and on time about 90% of the time. Landlords whose tenants use autopay see on-time payment rates of 99%, compared to 88% for those who don’t — a gap that holds even for tenants with weaker credit histories. That kind of consistency is the difference between rental income that reliably contributes to cash flow and income you’re constantly chasing. 

Beyond payments, modern apps handle lease signing, maintenance requests, income and expense tracking, and tenant communication from one place, and from your mobile phone. That’s a significant part of what makes house hacking a realistic option for people who aren’t looking to make landlording a second career. 

RentRedi helps house hackers improve cash flow

Whether you’re renting out an extra bedroom, a parking space, a storage unit, or a multi-unit property, RentRedi handles everything from listings, tenant screening, and lease signing, to rent collection, maintenance coordination, and expense tracking from a single mobile-friendly dashboard. Payment schedules can be customized for weekly rentals like parking or salon chairs, set up as month-to-month leases for short-term arrangements, or configured with automatic rent increases for multi-year leases.

The numbers reflect how much the platform improves cash flow outcomes. Tenants screened through RentRedi pay on time at a 90% rate. Using its autopay brings that on-time payment rate to 99%. Landlords whose tenants opt into RentRedi’s credit reporting feature, which sends on-time payments to Equifax, Experian, and TransUnion, see a 13% increase in on-time payments, because tenants have a real incentive to stay current.

For renters working toward homeownership, RentRedi’s rent reporting can improve credit scores by up to 26 points over 12 months of on-time payments. Income and asset verification through Plaid makes it easier to qualify non-traditional applicants (freelancers, gig workers, and students) without requiring sensitive documents to change hands.

For everyday Americans, the tools to manage rentals have never been more accessible, the creative possibilities have never been broader, and the financial case has never been stronger. Whether the goal is making a mortgage more affordable, building equity faster, or taking a first step into real estate investing, the opportunity may already be sitting inside the home you live in.