Turning your Primary Residence into an Income Generating Property
We had been living in the small single-family home for almost a year. 19 Revere Ct. was cozy, but we felt on top of each other. As we started talking about plans for baby two, we began contemplating expanding the livable space. Could we refinish the basement? Add a screened in porch? Chad was really excited to do the work himself, which was going to save us money. We explored layouts and prices, and we ultimately realized that redoing the house would not get us our money back. The neighborhood was a little bit older, and all of the homes were single-family ranch style homes. By investing a ton of money into the house to make it what we wanted, it would have been at the top of the market for the neighborhood. For that new price point, we thought it would be much more likely for a family to purchase in a different neighborhood. This could make selling hard down the road.
You never want to have the most expensive house on the block.
It was winter, and we were getting ready to go to Chad‘s family Christmas party. I had notifications from Redfin set on my phone, you know, just for fun! A new house popped up that happened to have an open house that afternoon. We decided we would go look at it, just to see what all was out there. Like I said, buying a new house wasn’t in the forefront of our minds at this time. Well, wouldn’t you know we fell in love with that house. It had five bedrooms, 2 1/2 baths, a backyard, garage, really nice kitchen, a huge walk-in closet and walk-in pantry, a partially finished basement, and more. Not all of the finishes were our style, but the house was situated in a beautiful neighborhood, on a perfect little cul-de-sac. We headed to the family Christmas party with a little more pep in our step. We kept saying there was no way we were going to buy it, but gosh it was beautiful and something like that would be nice down the road. A few cocktails later and we were talking about how we could afford it and make it happen.
We headed to Mexico for Christmas with my dad, sister, and brother-in-law to celebrate my dad’s 70th.
While we were in Mexico, we went back-and-forth with our realtor, competing with other buyers, coming up with our final and best offer. We submitted a letter and offer to the sellers, Craig and Holly. When it was all said and done, we were under contract!
When we moved in, we began making minor changes. We added a privacy fence for our dog, swapped out light fixtures, updated paint colors throughout the house (including the stone fireplace), and Chad redid the deck. It was beautiful, but it was expensive!
When we were talking with our neighbors, they suggested Airbnbing our home when we were out of town. Chad and I were no strangers to sharing spaces. We both lived in a fraternity and sorority, had plenty of post-college roommates, and had also lived in several places together. We definitely were intrigued by the idea right away, especially when they told us we could get $1,200 a night at graduation!
That summer, we listed our home on Airbnb for the 14 days we would be in Europe. Securing two different families to stay in our family home while we were gone gave us so much financial freedom.
We started talking about what it meant for the future ::lightbulb:: Oh. My. Gosh. We could travel whenever we wanted, and renting out our home would cover the price of the accommodations! It was an awesome feeling.
Living in a college town was money! Literally. We quickly realized that families were drawn to our house because of its size. Instead of renting individual hotel rooms, they could all stay together. It also appealed to families with children because we had a crib, childproof cabinets, toys, and a yard. We rented our house to different families almost every home football game that fall.
If there is one piece of advice I could give you it would be to consider renting your space to pay for your travels. While it might feel strange at first to have others in your home, that feeling will pass when you receive your first check for a couple thousand dollars.
We have lots of tips/checklists/purchases that made things easier that I will share later, but for now I will close by sharing photos from some of the getaways we took while renting our home. We traveled Europe (Spain, Italy, and France), flew to Denver to tell my family we were expecting baby two, drove to my hometown to spread my dad's ashes, stayed in a cabin in northern Michigan, soaked up the sun and sand in San Diego, and visited my very best friends in Indianapolis.