Can Your Next Home Pay for Itself?

HOUSE HACK YOUR MORTGAGE  —  ARTICLE 01 OF 06  —  HouseHackTexas.com

You’ve run the numbers. You know what you can afford. And it’s… tight.

That’s the reality for most first-time homebuyers across Texas right now. Whether you’re shopping in DFW, Houston, Austin, San Antonio, or Waco, the story is the same: home prices climbed, mortgage rates followed, and suddenly the monthly payment on a starter home feels anything but starter-friendly.

But what if part of your home, a finished garage apartment, a backyard ADU, a basement suite, or the other half of a duplex, could help pay the mortgage every single month? That’s not a fantasy. It’s called house hacking, and it’s how a growing number of Texas first-time buyers are making homeownership not just affordable, but financially smart.

This is Article 01 in a 6-part series that walks you through the entire process: how to find the right property, run the numbers, build or prep the rental space, find a great tenant, and ultimately use that rental income to build real wealth.

House hacking is simple: you buy a home with a rentable space, live in part of it, and rent out the rest. The rental income offsets your mortgage payment, sometimes dramatically.

The “hack” isn’t a shortcut or a loophole. It’s just a smarter way to think about what a home can do for you. Instead of treating your house purely as a place to live, you treat it as an asset that works while you sleep.

House hacking has existed as long as people have been renting rooms. What’s changed is the context. In Texas markets right now, having a tenant help carry the cost isn’t just a nice bonus — for many buyers, it’s what makes the math work at all.

Let’s use a real Texas example.

Say you purchase a home in the Fort Worth suburbs with a finished garage apartment. Your total mortgage payment, principal, interest, taxes, and insurance, comes to $2,600 a month. The garage apartment rents for $1,050 a month.

Your effective monthly housing cost? $1,550.

That’s a 40% reduction in what you pay out of pocket. Over one year, you keep $12,600 in your pocket instead of sending it to the bank. Over five years: $63,000, money you could use to pay down your mortgage faster, save for your next investment, or just breathe easier.

And that’s a conservative example. In Austin or Houston, well-designed ADUs often rent for $1,200–$1,600/month. Some Texas house hackers cover 60%, 80%, or even 100% of their mortgage payment.

Texas Rent Snapshot (2025)

Garage apartment / ADU rents vary by market: DFW suburbs $950–$1,400/mo · Houston $900–$1,350/mo · Austin $1,200–$1,800/mo · San Antonio $850–$1,200/mo · Waco $700–$1,050/mo. These are estimates, always run comps for your specific zip code before buying.

Not every home is a house hack candidate. Here are the three setups that work best for beginners, along with what’s most common in each Texas market.

A duplex is two fully separate living units side by side or stacked, on one property. You live in one unit and rent the other. This is house hacking at its cleanest: maximum rental income, maximum privacy for both you and your tenant, and you may qualify for FHA financing with as little as 3.5% down on owner-occupied multi-family properties (up to 4 units).

DFW and Houston have solid duplex inventory in established neighborhoods. San Antonio and Waco tend to have more affordable duplex options than Austin, where prices run higher.

A well-maintained duplex: owner lives in one unit, tenant covers a large share of the mortgage from the other. BONUS: find one with a 2 bed 2 bath unit and get a roommate for your unit as well to maximize income potential.

An ADU is a separate, self-contained living space on the same lot as your primary home, a backyard cottage, a detached garage apartment, or a converted outbuilding. ADUs command premium rents because tenants value the extra privacy, and they’re increasingly common in Austin, where the city has aggressively relaxed ADU zoning rules.

Texas has been broadly ADU-friendly in recent years. Austin, in particular, allows ADUs on virtually all single-family lots. DFW, Houston, and San Antonio vary by municipality, but the trend is clearly toward more permissive rules. We’ll cover how to check your specific city in Section 4.

A modern detached ADU — the kind of rentable backyard space that can generate $1,000–$1,600/month in Texas metros. This is mine above, currently leased for $1500/mo. It generated over $2k/mo as an airbnb but I didn’t follow the “separate access” rule 100% and we paid the price. The constant traffic running through my primary home driveway got a bit too much for my wife and I. 1 single tenant who’s gone half the week has been lovely!

Texas homes don’t have many basements (the clay soil makes them rare), but oversized garages, detached workshops, and in-law suites are everywhere. A properly converted and permitted garage apartment is one of the most cost-effective ways to add rental income to a home you’re already buying.

Look for homes that already have a converted garage apartment permitted — or properties with a large detached garage where conversion is clearly feasible. This is especially common in older Houston neighborhoods and Waco, where lot sizes tend to be more generous.

A converted garage apartment with a separate entrance is one of the most common house hack setups in Texas.

Short answer: almost certainly yes, but the details matter, and they vary more than you’d expect across Texas municipalities.

Here’s a quick rundown of what to know in each major market:

Texas Market ADU / Rental Suite Quick Reference

Austin: Most permissive in the state, ADUs allowed on virtually all SF lots, no owner-occupancy required. DFW: Varies heavily by city. Fort Worth and Frisco are generally ADU-friendly; some smaller suburbs lag. Always check city-specific zoning. Houston: No traditional zoning, but deed restrictions apply in many neighborhoods. Garage apartments are common and widely accepted. San Antonio: ADUs allowed in most residential zones; city has been streamlining the permit process. Waco: Smaller market, more straightforward, in-law suites and garage apartments generally permitted with standard building review.

For any property you’re seriously considering, here’s how to verify legality before you fall in love with it:

The biggest thing that holds first-time buyers back from house hacking isn’t money or zoning. It’s perspective.

Most of us are wired to think of our home as purely personal, a private sanctuary, not a financial tool. House hacking asks you to hold both ideas at once: this is my home AND it’s an asset that serves my financial future.

The people who do this well don’t feel like landlords grinding for profit. They feel like homeowners who made a smarter-than-average decision when they bought, and they get to prove it every month when the rent hits their account.

Reality Check

House hacking isn’t passive income that runs itself, especially at first. You’ll be a landlord, which means some responsibility. But as an owner-occupant, your “office commute” to handle a maintenance issue is measured in steps, not miles. Most long-term house hackers say the occasional landlord task is a small price for what they save, and once you’ve done it once, it gets easier fast.

Now that you understand the foundation, it’s time to get practical. In Article 02, we’ll walk through exactly what to look for when you’re touring homes across DFW, Houston, Austin, San Antonio, and Waco - including the specific features that signal strong rental potential, and one red flag most buyers completely miss.

We’ll also give you a printable Home Tour Checklist you can bring to every showing.

House Hack Your Mortgage  —  HouseHackTexas.com

Article 01 of 06: Can Your Next Home Pay for Itself?  ·  Serving DFW · Houston · Austin · San Antonio · Waco