How to live in a house and make money
My past couple of years in Greenville, my roommates and I have been renting out a house. We don’t know the owner. We’ve never met him before, but we know his name is Zach and we Venmo him a large chunk of change every month. So this guy owns the house, has a mortgage on it, and collects rent from us every month. This “Zach” character is using our rent money to pay his mortgage payments each month so he doesn't have to and has some extra leftover. AMAZING IDEA. This Zach guy is WAY better off than I am. He’s making money to own this house. I’m just giving my money to this guy and it’s gone forever.
BUT he’s not living in it, so he still has to pay his own rent/mortgage somewhere else AND there are much higher taxes on an investment property (one that you just rent out) then there are on a “primary residence” (one that you live in).
Now what if he lived in the house AND had roommates paying him rent???
GENIUS. So, let’s use this example of Scott. Scott bought a house, lives in the house, and has roommates paying him rent each month. Scott’s mortgage payments are 800 bucks a month. He can make the payments on his own if he needs to, but he rents his other two rooms out to his roommates for $450 a month (very affordable). Just off of rent alone, Scott makes 900 bucks. That’s $100 more than his mortgage payments!! PLUS, he doesn’t have to pay higher taxes because he’s living in the house and not just renting it out! Scott is legitimately getting paid to live somewhere.
Four years down the road when Scott gets married or moves to China, he’s going to sell it and all that cash goes right back into his pocket. Scott didn’t make any mortgage payments out of his own earnings the entire time he lived in the house and got paid for it.
Good for you, Scott. You’re a legend.
Now most people want to finally get done renting and buy a house. It’s normal. They want some more room, they want a yard, they think it’s just time, or they’re tired of renting, etc. So why not make some cash while you’re doing it? You aren’t swindling your roommates because they’re doing the exact same thing as they were before except now in an awesome house.
If you’re thinking about switching from renting to owning in the near future and want to live somewhere for free or even better, MAKE MONEY FROM IT…then learn from Scott.
P.S. This is a lesson I will be implementing very soon