House Hacking in Northern NJ: Live in One Unit, Rent the Other

by Scott Stewart

House Hacking in Northern NJ: Live in One Unit, Rent the Other

If you have ever looked at home prices in Northern New Jersey and thought, “How does anyone afford this?” you are not alone. Between higher prices, higher taxes, and rising interest rates, a lot of buyers feel priced out.

House hacking is one way to flip that script. In simple terms, house hacking is when you buy a multi family home, live in one unit, and rent out the others to help cover your mortgage and expenses. It is part home, part investment, and very much a lifestyle choice.

Scott has done this twice in Northern NJ, so this is not just theory. It is real, local, and doable when you understand the basics.

What is house hacking?

House hacking usually involves:

Buying a 2 to 4 family property
Living in one unit as your primary residence
Renting out the other unit or units
Using the rental income to offset your monthly payment and long term costs

Because you live in the property, it is considered “owner occupied,” which can open up loan options that are more favorable than pure investment loans. Think lower down payments in some cases, and often better interest rates than a non owner occupied property of the same size.

You are both a homeowner and a small scale landlord, often for the first time.

Why Northern NJ is a great fit for house hacking

Northern NJ has a few things going for it that make house hacking especially attractive:

Strong rental demand from commuters, local workers, and people who want access to NYC without NYC prices
Established multi family housing stock in towns like Bloomfield, Glen Ridge, Montclair, Clifton, and other nearby areas
High relative rents that can meaningfully offset a mortgage, even with taxes and maintenance

In other words, you are in a market where people want to rent, and are willing to pay for location, transit, and quality housing.

Scott’s first house hack in Glen Ridge (2018)

In 2018, Scott bought a 2 family home in Glen Ridge after spending a handful of years in a condo in Montclair. He chose to live in the second floor unit and rent out the first floor.

Some of the things he did as an owner occupant investor:

Updated bathrooms to improve both his own quality of life and the property’s rental appeal
Installed ductless air conditioning, which made the home more comfortable and more competitive in the rental market
Used the rent from the first floor unit to offset a significant portion of his mortgage payment
Gained more living space and outfoor space after living in a 1 bedroom condo

That Glen Ridge property was his introduction to combining long term wealth building with day to day living. He was not just waiting for appreciation. The property started to “work” for him each month through rental income.

Scott’s second house hack in Bloomfield (2025)

In 2025, Scott did it again, this time in Bloomfield.

He purchased another 2 family home and again chose to live in the second floor unit. The first floor unit is currently run as an Airbnb, while Scott enjoys his own space upstairs with:

A separate private entrance
A private backyard complete with hot tub
Larger living space

This strategy gave him:

Flexibility in how he generates income on the first floor unit
A comfortable, private living arrangement that does not feel like he is living “inside” his investment
Another asset in a strong Northern NJ town with solid demand

Between Glen Ridge and Bloomfield, Scott has lived what many buyers only hear about on podcasts. Two separate house hacks, both within a short drive of each other, both built around the idea that your home can help pay for itself.

The core benefits of house hacking

Here are the main reasons people are drawn to house hacking in Northern NJ.

1. Offsetting your mortgage

Rental income from the other unit or units can:

Cover a portion of your mortgage
In some cases, cover most or nearly all of it, depending on the numbers

This does not mean you live “for free.” You still have taxes, insurance, maintenance, utilities, and vacancies to think about. But compared to owning a single family home with no rental income, house hacking can dramatically reduce your monthly out of pocket cost.

2. Building equity over time

While your tenants pay rent, you are paying down the loan and building equity. Over time, that equity can position you for:

A future move up home
A refinance
Additional investments

Instead of feeling stuck renting indefinitely, you are using the same monthly housing dollars to own an asset.

3. More favorable financing than an investment property

Because you live in the property, lenders typically treat it as owner occupied:

You may qualify for lower down payments than a pure investment property
Interest rates are often better than non owner occupied loans
Some loan programs are specifically designed for owner occupied 2 to 4 family properties

Every situation is different, and you need guidance from a qualified lender, but the structure itself is what opens these doors.

4. Flexibility and options

Once you own a house hack, you have choices:

Keep living in one unit and renting the others
Move out in the future and convert your unit to a rental, turning the whole property into an investment
Sell later to a buyer who also wants to house hack

You are not locked into just one path.

What financing usually looks like

While specific loan terms depend on your lender and financial profile, here are general basics for owner occupied 2 to 4 family properties:

The property must be your primary residence for a certain period, typically at least one year according to most owner occupied loan guidelines
Loan programs can include conventional mortgages, and in some cases FHA or other low down payment options
Some lenders consider a portion of the rental income when qualifying you, which can help with your debt to income ratio

You still need to qualify based on income, credit, and reserves. House hacking is not a shortcut around sound lending standards. It just uses the property’s income potential to help support your purchase.

The responsibilities and tradeoffs

House hacking is not passive or effortless. Before you jump in, it is important to understand the reality.

You will be:

A landlord, with all that involves, including tenant screening, leases, repair coordination, and being on call when issues arise
Sharing a building with your tenants, so privacy, noise, and boundaries matter
Managing cash flow and reserves to handle repairs, vacancies, and unexpected expenses

For Scott, the tradeoff has been worth it. He has built long term assets and created flexibility in his personal and professional life. But it is important to decide if this lifestyle fits your personality and goals.

Is house hacking right for you in Northern NJ?

House hacking could be a fit if you:

Want to buy in Northern NJ but are concerned about affordability
Are open to living in a multi family instead of a single family right away
Are willing to take on the responsibilities of being a landlord
See your home as part of a long term financial plan, not just a place to sleep

It might not be a fit if you value maximum privacy, do not want to manage tenant relationships, or prefer a very quiet, single family style environment.

How Scott Stewart Homes can help

If house hacking is on your radar, you do not need to figure it out alone.

Our team can help you:

Identify 2 to 4 family opportunities in towns like Glen Ridge, Bloomfield, Montclair, Clifton, and surrounding areas
Run realistic numbers on potential rental income, expenses, and cash flow
Connect with trusted local lenders who understand owner occupied multi family financing
Talk through lifestyle questions, not just spreadsheets, so you can decide if this is really right for you

House hacking is not a magic trick, but it can be a powerful way to live in Northern NJ, build equity, and create options for your future.

If you want to explore what this could look like for you, reach out. Scott is happy to share more about his own experiences in Glen Ridge and Bloomfield, and help you take your first step toward a home that also works as an investment.