Buying a home in Malaysia is no longer the straightforward milestone it once was. Skyrocketing prices, rising rents and wages that fail to keep up are pushing many young adults to rethink what a first home should be. House hacking offers a practical solution. By living in one part of a property and renting out the rest, young Malaysians are turning their homes into financial tools. For Gen Z, reports suggest this strategy is more than clever; it has become a financial tool for the priced-out generation.

What is house hacking?

House hacking, a concept popular in the United States, involves buying a property and generating rental income to offset living costs. In Malaysia, the most common approach is renting out rooms in multi-bedroom apartments. Some also explore short-term rentals in tourist areas, although seasonal fluctuations and regulatory requirements make this less straightforward. The principle is simple. Reduce your own housing costs while building equity in a property. For many young buyers, it is not about instant profit but about making homeownership financially viable right from the outset.

Why Gen Z is embracing it

Traditional pathways to homeownership have become increasingly difficult to follow. Urban property prices have risen faster than wages over the past decade while rents near public transport, universities and commercial centres continue to climb without restraint. Renting now eats a significant portion of monthly income, making it difficult for young adults to save enough cash for a deposit. House hacking addresses this gap by allowing tenants to contribute to mortgage payments. Beyond financial relief, it also provides a crash course in practical money management, from budgeting to maintenance and tenant relations. For example, a three-bedroom apartment with a monthly mortgage and utilities of RM2,600 could be reduced to around RM850 out-of-pocket if the other two rooms are rented at RM850 to RM900 each.

Challenging cultural norms

House hacking affects the traditional expectations of landlord and tenant roles as well. In Malaysia, landlords are usually invisible, rarely interacting with tenants. House hacking actually reverses this model. Homeowners live alongside tenants, sharing common spaces and navigating day-to-day co-living realities. Privacy is no longer guaranteed but financial relief and early access to homeownership can outweigh these sacrifices. The strategy reflects a generational shift towards practicality and flexibility, emphasising function over the notion of a perfect or aspirational home.

The importance of location

Success depends heavily on where the property is located. House hacking works best in dense, well-connected areas with strong rental demand, such as near transit stations, universities, hospitals or business hubs. In suburbs or car-dependent neighbourhoods, rental demand is weaker and may not cover mortgage costs. The approach underscores the broader point that urban planning, transport accessibility and proximity to services directly affect young people’s housing choices. Locations that support shared living or room rentals make it feasible to turn a home into a financial tool.

Risks and considerations

House hacking is not without its downsides. Rental income is not guaranteed and vacancies can really eat into savings. Homeowners are still responsible for maintenance, utilities and sinking fund contributions. Over-investing in renovations to attract tenants can also create financial strain. There are legal and regulatory factors to consider, including strata rules, council approvals and loan conditions. On the lifestyle side, living with other tenants in one’s space requires tolerance, patience and clear boundaries. The success of house hacking depends as much on temperament and interpersonal skills as it does on financial calculations.

The broader implications

Critics argue that house hacking highlights the deeper problem of housing affordability. Needing to rent out parts of a home just to make ownership viable raises questions about wages and market access. Yet supporters view it as a shining example of adaptability. House hacking allows young adults to enter the property market sooner, build equity and acquire practical financial skills that renting alone does not offer. Even if it is temporary, the strategy essentially gives them a foothold in the system. It also sparks wider debates about privacy, shared living and urban inequality, showing how creative solutions can emerge when the market no longer cares about traditional expectations.

A generational mindset shift

Millennials often bought later in life, prioritising family needs and viewing property primarily as a long-term investment. Gen Z, however, focuses on cash flow, flexibility and practicality. They are prepared to compromise on space or privacy if it enables them to own a home. House hacking exemplifies this shift even further. It is not about living in luxury but about making the numbers work. Young homeowners are redefining what homeownership means, proving that crafty strategies can succeed even in challenging markets.

Why it is noteworthy

House hacking has emerged as a fascinating trend that beautifully intertwines property dynamics, economic shifts and social transformations. Rather than being a phenomenon dictated by developers or government policies, it springs from individuals seeking creative solutions to essential living expenses. This strategy not only highlights existing inequalities but also thrives predominantly in vibrant, interconnected cities where the demand for rentals is strong.

At its core, house hacking pushes the boundaries of traditional views on privacy, communal living and lifestyle aspirations. For a business audience, it gives a compelling lens through which to explore evolving consumer behaviours, shifting urban trends and the values of today’s generations. This makes it an essential topic for anyone involved in property, finance and lifestyle discussions.

House hacking in Malaysia is an interesting and practical approach to homeownership. It effectively lowers housing costs, helps build equity and teaches young homeowners crucial financial skills. This method challenges traditional views on co-living and privacy while offering a fresh perspective on owning a home in a market where conventional paths often fail to meet the mark. At its core, house hacking serves as an essential financial tool for the generation struggling with high prices, enabling young Malaysians to achieve homeownership on their own terms and successfully navigate a property market that defies traditional expectations.

This article was first published in Starbiz7.