An Easy way to live rent free by utilizing House Hacking

One of the most interesting concepts I’ve come across is the idea of “House Hacking”. House Hacking, when implemented means you can live essentially in a house without paying any rent or mortgage. This sounds pretty awesome right?

I first came across the idea of House Hacking when I got interested in the sharing economy around the time Airbnb became popular in the early 2010’s. I live in London, which if you also do you will know the rent prices here are crazy high. From working in the vacation rental industry for a number of years, House Hacking is something that I can verify works if you can find the right property and location. 

So what is House Hacking?

House Hacking is when you utilize an asset (your house) in order to cover some or all of the payments needed to live there (rent or mortgage). This can be implemented in the following ways:

Renting out a Room in your House

If you live in a house where you have a spare bedroom, by renting it out you can often cover at least 50% of the mortgage or rent payments. If you live in a city like London that is ripe with tourists (post covid) then you can list the property on the short let market on a platform like Airbnb and rent this out to tourists and make a killing. From personal experience you can easily achieve an average nightly price of £50 pounds or more over the summer. In the below example I will show you how you can decrease your rent costs using this method:


Rent for 2 bedroom flat: £1500 per month

Nightly Rate: £50-£70

Nights rented: 20 per month (66% occupancy)

Gross per month from Airbnb: £1000- £1400 

The above example assumes that you will be renting the room out only 66% of the time, meaning you will basically have a private flat to yourself for the rest of the month.

If you increased your occupancy from 66% to 85% (25 nights a month) you can expect to earn between £1250- £1750 per month! One other thing you can factor in on a per booking basis you can charge a cleaning fee, which for London can competively work out to be around £10-20 per booking. If you decided to do the cleaning yourself then you could easily make an additional £100 per month.

A few other comments about House Hacking:

Be compliant:

A lot of long let contracts will have clauses that don’t allow subletting of the property. It is best to be upfront with your landlord before you start to do this strategy to make sure you are able to do this within the agreement of your tenancy.

How to check nightly rates:

You can find out nightly rates by searching for properties in your area on Airbnb. You can filter for number of guests, type of room and then you will be able to find similar properties to yours to see what you should be able to rent it for.

One other tool you can use is as they scrape all of the Airbnb booking data and if you pay them a fee of around 25 USD per property they will be able to give you accurate projections of occupancy and nightly rate.

Rent a room scheme (UK only)

The government allows you to receive income from renting a room out up to £7500 per year, tax free. This is quite generous and with this strategy it means you can make a decent chunk of income from Airbnb guests without incurring any tax bills. Please make sure you speak to a licenced accountant before making any decisions about your specific tax situation.

The above example is based on property and booking data in the London market. The same concept and methodology can be used in any city in the world.

Let me know your thoughts, does anyone currently implement this strategy?

*Please note, this blog post is intended to provide commentary and not personal advice, please seek professional guidance to know if this strategy makes sense for you.*

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