Hey Bigger Pockets! So, my fiancé and I got tired of being benchwarmers in the home-buying game, and we decided to make our grand entrance in August 2023, right when interest rates were doing their best sky-high impersonation at nearly 7%. I mean, why wait for the perfect moment when you can create your own, right? Realizing the importance of safeguarding ourselves in a potentially volatile market, I knew we needed to focus on homes with house-hacking potential. I'm sharing this for those in a similar situation, looking for creative ways to step into the housing market.

Initially, our search honed in on homes with a floor plan suitable for renting two private short-term rental units while residing in the property. We struggled to find anything meeting our criteria without requiring costly modifications until we stumbled upon the next-gen home we currently reside in. For those unfamiliar, a next-gen home is basically the Swiss Army knife of houses, made for multi-generational living. It comes with an attached guest suite decked out with its own kitchen, exterior entry, laundry facilities that would impress your grandma, and a separate bedroom and living room space.

This option immediately caught my eye as I pictured the guest suite as potential rental income. I successfully secured a renter for the next-gen side at $1,350.00 a month, while still under contract. But wait there's more! On our very first night in our new home, I had a revelation at 1 AM (because, of course, all great ideas strike in the wee hours), and I realized I could turn the front bedroom and bathroom into a third area for some Airbnb magic. Pitched the idea to my fiancé, who initially said, "Yeah, explicit right." But you know I'm persistent. It took a solid six weeks of sweet-talking, and maybe a little bribery, but she finally caved. In October, we framed in a wall, and furnished it all for around $3,500. Since then, we've been raking in over $2,000.00 a month, and expect to make close to $3,000.00 a month during the high season January - April.

Disclaimer: Not all HOAs will allow for short-term rentals; however, most governing these homes permit renting your next-gen suite for durations of 6+ months.

Now, not everyone can turn their home into a triplex, I get it. But the chance to to offset mortgage costs with rental income from a guest suite could open the door to homeownership for many first-time buyers in this market.

Bonus: Builders of these homes in my area are offering an attractive 4.25% rate from the builder, providing a golden opportunity to secure a rate lower than market average while initiating that rental income dance, all while leveraging as low as a 3.5% down payment. 🏡💰

Gilbert, Arizona

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Living for free thanks to House-Hacking my home into a tri-plex

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