House Hack Your Way to Homeownership

"What if your next home came with built-in income? Discover how living in one unit and renting out the others could slash your housing costs and build your wealth at the same time."

When most people think about buying a home, they picture a single-family house. But there's another option that could make homeownership more affordable and help you build wealth faster, buying a small multi-unit property.

FHA, VA, and conventional lenders allow qualified buyers to purchase up to a four-unit property if they live in one of the units. That means you could buy a duplex, triplex, or fourplex, move into one unit, and rent out the others. The rental income from your tenants can help offset your monthly mortgage payment, often making your housing cost less than if you bought a single-family home.

This can be a game-changer because of:

• Lower monthly cost: Rental income helps cover your mortgage, taxes, and insurance.
• Forced savings: Part of every payment reduces your loan balance (amortization).
• Rising values: If the property appreciates over time, you build equity on the entire building, not just your unit.
• Future investment potential: You could eventually buy another owner-occupied multi-unit property and keep the first one as a full-time rental. Over time, this can grow into a valuable real estate portfolio.
• Flexibility: Later, you might choose to tap into your equity to purchase a single-family home while keeping your rental properties as income-producing assets.

Not every neighborhood has multi-unit properties for sale, so you may need to broaden your search. And while you don't have to be a professional landlord to start, you should be comfortable with the idea of managing tenants or hiring a property manager.

If you're open to living in one unit and renting out the rest, this strategy, often called "house hacking, can be a smart way to make homeownership more affordable and build wealth at the same time.

Example: How Rental Income Can Lower Your Housing Cost

Let's say you buy a duplex for $450,000 using an FHA loan with 3.5% down.

• Your monthly mortgage payment (including taxes & insurance) might be around $4,287.
• If you can rent one unit for $2,500.
• Your out-of-pocket cost is $1,800 a month to own the property and live in one side.

Instead of paying full price for a single-family home, your tenants help pay the bulk of the bill while you're building equity and benefiting from appreciation on the entire property.  Tax advantages to the rental unit includes deducting maintenance and depreciation.

(Numbers are for illustration only; actual costs and rents will vary by property, location, and market conditions.)

If you'd like to explore multi-unit properties in our area and see how the numbers might work for you, let's talk!  You can also download our Rental Income Properties.

Delay Gratification Now for greater Rewards Later

There's a classic example used in behavioral psychology: the marshmallow test. In this experiment, children were given a choice: eat one marshmallow now, or wait a little while and get two. The lesson? Those who could delay gratification tended to experience greater success later in life.

That same principle applies beautifully to homeownership.

If your ultimate goal is to one day have your home completely paid off, the question becomes: are you willing to make small sacrifices now so you can reap bigger rewards later? Or will you choose comfort and consumption today and carry the financial burden of a mortgage into your retirement years?

Making regular additional principal payments on your mortgage is one of the smartest forms of delayed gratification. It's not glamorous. It means driving the same car a little longer, skipping that expensive vacation, or resisting the urge to upgrade your lifestyle with every raise. But those steady, disciplined extra payments�say $100 to $200 each month�can shorten your loan by years and save you tens of thousands of dollars in interest.

More importantly, it puts you on track to own your home outright.

Imagine reaching retirement without a house payment. Your monthly expenses drop dramatically, giving you more flexibility and freedom. You may not need as much in retirement savings. You could choose to work less, travel more, or simply breathe easier knowing that no one can take your home from you.

On the flip side, choosing not to delay gratification, maxing out your lifestyle, refinancing to take cash out, or simply making minimum payments, can mean carrying a mortgage into your 60s or 70s. When many people want to slow down and enjoy the fruits of their labor, they're still stuck paying for yesterday's choices.

The marshmallow test isn't just about kids and candy. It's about life and how we make financial decisions. A little patience now, a little extra toward your mortgage each month, can lead to a lifetime of reward.

So, ask yourself: will you wait for two marshmallows later? Or settle for just one now? The path to a paid-for home starts with the power of delayed gratification.  Use our Equity Accelerator calculator to make projections to pay your home off sooner.