I am a firm believer that renting out rooms is the ultimate life hack. It takes some getting used to and it is not for everyone. But if you can pull it off, it has almost unlimited potential. It is a great way to generate income and build wealth. Here is how we leverage rentals to pay for our 3 homes.
My mom lives in our house in Arizona. She has a couple of roommates that help her pay the mortgage. I don’t have to worry about anything. Every once and while there is a maintenance issue. but other than that, it’s completely hands-off. Perfect.
This home we rent to a good friend of mine. He takes great care of it. We rent it below far market value, which is okay. A good tenant is worth more than a couple hundred dollars. We pay $1100 a month and we collect the rent of $1250. After he leaves, we will rent it for about $1500-$1600 more.
This is the home we currently live in. The freedom of being on 3 acres is so refreshing. We pay $1750 a month. However, we rent out the two masters for $800 each. So we collect $1600 from this house and $150 from house #2, making our total collection $1750. Which is, shockingly, the complete mortgage for house #3. Life is good.
I think the most important thing is that we are teaching our kids how to leverage their assets to live a more stress-free lifestyle. Eventually, the room rents will get to $900-$1000, so the kids will be able to live here for free. That makes me feel good knowing that my kids will be able to provide and take care of themselves. The power of living below your means and thinking outside of the box.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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