First-time buyer guide
Planning your next move in Indianapolis: first home or house hack
Before you look at listings, decide what kind of move you're making. Here are the four common paths for Indianapolis buyers and what each one asks of you.
What should your next move in Indianapolis be? Most buyers I talk with land on one of four paths: a home that's all yours, a home with a room you rent out, a duplex or small multi-unit building you live in, or selling one home to buy the next. Pick the path first. The lender conversation, the search and the offer all get easier once you know which one you're on.
House hacking means buying a home you live in and renting part of it, a room or another unit, to help offset what you pay. It can help. It also makes you a landlord, with tenants, repairs and months when a unit might sit empty. It's one good way to buy, not the only smart one.
Start with how you want to live
Before you think about houses, think about your week. Where do you work, or do you work from home? Where do you spend a Saturday? How much space do you need, and how much do you want to take care of? Would you be comfortable sharing a wall, a driveway or a kitchen with someone who pays you rent?
Before real estate I taught high school Anatomy and Physiology for five years. I still start big decisions the way I started a new unit: with the questions, not the answers. You don't need answers yet. You just need to know which questions matter to you.
Four paths, side by side
| Path | What it is | What it asks of you |
|---|---|---|
| A home that's all yours | A house, condo or townhome where only your household lives | The whole payment is yours, and so is every repair |
| Rent a room | You live in the home and rent a bedroom to someone | Shared space, house rules and picking the right person |
| Live in a 2-4 unit building | You live in one unit and rent the others | Tenants, leases, repairs on shared systems and empty months |
| Sell and buy | You own now and want to move | Timing two sales and deciding which comes first |
Nothing in that table is a promise. Rent is an estimate until a lease is signed, and a lender decides what you can borrow.
If a house hack is on the table
A house hack changes the questions you ask early. On a duplex, triplex or fourplex, the loan rules matter as much as the building. An FHA loan on a 2-4 unit home comes with a move-in rule, a rent test on three and four units, and its own way of counting rent. The FHA guide for 2-4 unit homes in Indianapolis walks through each one.
Renting a room or the other side of a double brings city and state rules too: rental registration, security deposits and, for stays under 30 days, a short-term rental permit. Read the rules before you rent a room in Indianapolis before you count on any rent.
Not sure it fits? The house-hacking quiz asks about the tradeoffs directly: shared space, being on call for repairs, and how you'd handle a month with no tenant. It won't tell you that you qualify for a loan. For the Indianapolis numbers and strategies behind it, Roots Realty has a guide to house hacking in Indianapolis and a house hack guide for buyers.
If you own now and want to move
When you already own, the big question is order. You can sell first and then buy. That gives you a clear number to work with, but you may need somewhere to live in between. You can buy first, which can mean carrying two homes for a while, if your lender allows it at all. Or you can make an offer that depends on selling your current home. Some sellers accept that and some won't.
Your lender can tell you which of these your finances support. Have that conversation before either home goes on the market.
Questions to take to a lender
Talk to a lender before you tour. These questions fit any of the four paths:
- Which loan programs fit the kind of home I'm considering?
- How much cash will I need at closing, beyond the down payment?
- What monthly payment would that be, with taxes and insurance included?
- If I buy a 2-4 unit home, how would you count rent from the other units?
- What should I avoid doing with my credit or savings before closing?
A pre-approval is an estimate, not a final loan approval. That comes later, after the appraisal and underwriting. I don't take loan applications, so a lender makes those calls. Pick a payment you can live with, not just the most you can borrow.
Where in Indy
The path you pick shapes where you look, and where you want to live shapes the path. A community that fits your week might not have many duplexes for sale, and the reverse happens too.
Find Your Place in Indy is a two-minute quiz that suggests communities to explore based on what matters to you, like walkable outings, parks and trails, space and evening activity. You get places to look and the reasons behind them, not a verdict. When you're ready to get specific, the wants and needs checklist helps you sort what you can't live without from what would be nice.
A manageable next step
Pick one: take the house-hacking quiz, try Find Your Place, or start your checklist. If you'd rather talk it through, talk with me. A conversation doesn't commit you to buying anything.
I'm Kyle Hoffman, a REALTOR with Roots Realty Co., licensed in Indiana, and an Indianapolis native.
Last reviewed September 2026.
This is general information, not lending, tax or legal advice. A lender decides any loan.
Common questions
What is house hacking?
House hacking means buying a home you live in and renting part of it, either a room or another unit in a 2-4 unit building, to help offset your housing costs. The rent only helps while someone is paying it. You also take on landlord work: finding and screening tenants, leases, deposits and repairs.
Can I buy a duplex as my first home in Indianapolis?
Yes, if you plan to live in one of the units. Owner-occupied loans, including FHA loans on 2-4 unit homes, expect you to actually live there. FHA, for example, requires at least one borrower to move in within 60 days of closing and intend to stay at least a year. A lender decides whether you qualify for a specific building.
Should I sell my house before I buy another one?
It depends on your finances and how much risk you can carry. Selling first gives you a known amount to put toward the next home but may leave you needing a place to stay. Buying first can mean paying for two homes for a while. An offer that depends on your sale is a third option, though some sellers won't accept it. Ask your lender which ones your finances support.
Is a pre-approval the same as a loan approval?
No. A pre-approval is a lender's estimate after reviewing your income, debts, credit and savings. The final approval comes later, after the appraisal and underwriting on the specific home you're buying.
What do I take on if I rent out a room in my Indianapolis home?
You become a landlord for that room. That means screening the person, putting the arrangement in writing, and following Indiana's security deposit rules. The City of Indianapolis also has a rental registry, and stays under 30 days through a booking platform need a short-term rental permit. Check the city's rules for your address before you advertise.
About the author
Kyle Hoffman, REALTOR®, Roots Realty Co.
Licensed in Indiana, #RB23001739
I'm a proud Indianapolis native and a former high school Anatomy and Physiology teacher. Now I help people buy first homes and house hacks, one step at a time.
Could house hacking fit your life?
A short quiz with options to explore, not a verdict.