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How to House Hack with Stessa
How to House Hack with Stessa

If you're an owner occupant and a landlord all at a single property, you're house hacking. Use "Splits" to allocate your expenses properly.

Victor Perez avatar
Written by Victor Perez
Updated over a week ago

What's House Hacking?

House hacking, as it has come to be known in recent years, is an approach that combines some of the benefits of owner-occupant residency status with the potential gains of rental property investing, all within a single property. Whether you rent out a bedroom, a studio above the garage, an attached unit, or an entire structure, you're house hacking if you also live on the property personally.

This situation creates some unique accounting challenges, most of which Stessa can handle with just a few slight modifications.

Talk to Your CPA First

As a reminder, please note that Stessa does not provide accounting, legal, or tax advice and we are certainly not your CPA, attorney, or tax advisor. We strongly recommend reaching out to a qualified CPA to understand all the complicated tax regulations that are applicable to house hacking scenarios.

Fundamentally, you're using a portion of what is otherwise an investment property, for personal benefit. The portion of the asset used for investment purposes is subject to all of the relevant tax regulations around investment property, while the portion being used personally is subject to a completely different set of rules.

This is why you'll need to allocate various costs and expenses between the two types of uses. Exactly how you allocate is a fact-specific determination, and is best done with the benefit of professional advice from a qualified CPA. A good tax advisor will start by walking you through a couple of different approaches to allocating costs and expenses, in order to figure out which will be most tax-advantageous for you.

Once you've figured out how to allocate expenses fairly between investment and personal uses, read on to learn how to do house hack accounting with Stessa.

Set Up Your Rent Roll Properly

For house hackers, we recommend including your owner-occupied unit in the total unit count for the Property via your Leases & Tenants page.

When you set up the rent roll, put "Owner-Occupied" as the tenant name and input the monthly rent as $0.01. This will keep your unit count and occupancy metrics on your Dashboards accurate, without throwing off your financials by more than a few pennies per year.

You'll notice that the tenant ledger connected to your "Owner-Occupied" tenancy will auto-generate one cent rent charges each month. You can simply ignore these or use the "Add a Credit" link to record a small payment amount to zero out the balance. This will then flip the unit status to "Current" so that it's no longer flagged.

Allocate Expenses: Rental vs Personal

You'll likely make heavy use of Stessa's popular "Split" feature when tracking expenses via your Transactions page. If you've linked your bank, credit card, and mortgage accounts as recommended, you'll see your transactions view auto-populate with income and expense data.

You'll want to assign each income line item to the proper Unit, which will then bring the tenant ledgers on your Leases & Tenants page current. Obviously, you should not have income items associated with your "Owner-Occupied" unit.

Next, you'll want to pay special attention to always allocate each expense line item appropriately. Sometimes an expense like a plumbing repair or new appliance can be 100% allocated to a particular unit. It's best to go ahead and assign the full amount to that Unit to avoid any confusion later about whether it should be allocated to investment or personal.

Other expenses are not so easily allocated if they confer a benefit on your personal use of the property. Snow plowing, landscaping upgrades, and property taxes, are just a few examples of the types of expenses that probably need to be allocated between investment and personal.

The easiest way to allocate, based on the percentage you've worked out with your CPA, is to use the "Split" button at the top of the Transactions page. This tool is so powerful that we've written an entire support article on how to use it:


Please direct all accounting questions to your CPA! If you have other questions about house hacking with Stessa or other best practices, check out the Community Forums to see what other owners are discussing. If you need to reach us directly, click the blue circle at lower right to open a new support conversation.

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