If you live in one part of a property and rent out another, you’re house hacking. Whether you lease a bedroom, a basement apartment, or an entire unit, you’re combining your personal residence and real estate investing. With Stessa, it’s easy to track both sides, as long as you allocate expenses properly using the Split feature.
What Is House Hacking?
House hacking means living in a property you also rent out. Common setups include:
Renting out a room or floor in your home
Living in one unit of a duplex, triplex, or fourplex
Leasing a garage studio or ADU while living in the main residence
This setup has unique financial benefits, but it also creates tax and accounting challenges, especially when separating personal and investment use.
Talk to Your CPA First
Stessa doesn’t provide tax, legal, or accounting advice. Since house hacking involves splitting expenses between personal and investment use, we strongly recommend speaking with a qualified CPA. A CPA can help you:
Choose a fair and legal method for expense allocation
Understand IRS rules for mixed-use properties
Maximize your deductions while staying compliant
Set Up Your Rent Roll Properly
To track occupancy and unit counts accurately, add your owner-occupied unit as a lease:
Go to Properties, select the property, and click the Leases tab.
Click Add New Lease for your personal unit.
Set the Tenant Name to "Owner-Occupied" and the Monthly Rent to $0.01.
This keeps your occupancy metrics correct without meaningfully affecting your financials.
Tip: A one-cent rent will auto-generate charges. You can ignore them, or add a credit in the tenant ledger to zero them out and mark the unit as "Current."
Allocate Expenses: Rental vs. Personal
You’ll likely use Stessa’s Split tool often to divide expenses between investment and personal use:
Go to your Transactions page.
Find the expense that needs splitting (e.g., landscaping, property tax).
Click the Split tool.
Allocate the appropriate percentage to your rental unit(s) and your owner-occupied unit.
Examples:
Fully investment use: Appliance repair for a tenant unit → allocate 100% to that unit.
Shared use: Property taxes, snow removal, landscaping → split based on the percentage agreed with your CPA.
Assign Income to the Right Units
Always assign rental income to the relevant unit.
Don’t associate any income with your owner-occupied unit.
Questions?
Please direct all accounting questions to your CPA.