House Hacking: is it worth the higher house price?

[Annie Tran]

I’m based in Utah. I’ve been thinking about househacking and would appreciate some advice, since I still don’t quite understand the advantage of house hacking. Two scenarios:

Scenario 1: House A

- Purchase price: $380k

- Monthly expenses (mortgage, insurance, tax): $1500

- No house hacking, so my family would pay the full $1500 monthly.

Scenario 2: House B (bigger, with an ADU)

- Purchase price: $460k

- Monthly expenses (mortgage, insurance, tax): $1900

- Rent out the ADU for $1200/month.

- My family would live in the main house and pays the remaining mortgage of $700/month

Considered that I’ll put down the same $ amount of down payment for both houses. Both houses are single family homes.

Here's the math:

- House A: Monthly expense is $800 lower ($1500 - $700).

- House B: The property is $80k more expensive.

- Time to recoup the difference: $80k / $800 = 100 months or 8.3 years.

In terms of finance, is house hacking worth it? It does decrease my monthly mortgage expense, but the houses that can be house hacked are often more expensive.

I'd appreciate your insights and experiences with house hacking. what number did it make sense for you to consider paying more for a house to house hack. Did I miss something as to why people want to househack so much? Please enlighten me! Thank you so much !