If you live in one part of a property and rent out another, you’re officially house hacking! Whether you lease a bedroom, a basement apartment, or an entire unit, you’re combining personal residence and real estate investing into one. With Stessa, it’s easy to track both sides of the equation—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 occupying the main residence
This setup provides unique financial benefits, but it also creates tax and accounting challenges—particularly when separating personal and investment use.
Talk to Your CPA First
Stessa does not 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 in Stessa:
Add Your Owner-Occupied Unit
Go to your Leases & Tenants page.
Add a new lease for your personal unit.
Set the Tenant Name to "Owner-Occupied" and the Monthly Rent to $0.01.
This ensures your occupancy metrics are correct without affecting your financials in any meaningful way.
Tip: A one-cent rent will auto-generate charges. You can ignore them or click "Add a Credit" to zero them out and mark the unit as "Current."
Allocate Expenses: Rental vs. Personal
Tracking house hack expenses correctly is key. Here’s how to handle it in Stessa:
Use the "Split" Feature
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)
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 agreed percentage with your CPA.
Assign Income to the Right Units
Rental income should always be assigned to the relevant unit.
Do not associate any income with your owner-occupied unit.
Questions?
Please direct all accounting questions to your CPA!