Luxury House Hacking: How to Have Your Cash Flow, Equity Appreciation—and Live for (Almost) Free, Too

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The main idea behind house hacking is to offset the burn of home ownership, making it possible to live for free or almost free. Mechanically speaking, this can be accomplished either with equity appreciation, income, or both. In my mind, there are a couple of ways to look at house hacking:

  • Equity House Hacking
  • Cash Flow House Hacking
  • Blended House Hacking

The equity house hack relies on equity appreciation, either organic or forced, and often the easiest way to perceive this is as a live-in fix and flip. You move into the house while you fix it up, and then you sell it for more—a flip. But, as is the case with any flip, there is no income component here.

A cash flow house hack is just the opposite, meaning that all of the emphasis is placed on the income, with total disregard for equity growth.

This is a lengthy discussion—and not appropriate for this article—but I’ve learned that healthy cash flow always rests upon healthy equity appreciation, and healthy equity appreciation always rests on healthy cash flow. It’s not me saying so—it’s the IRR. The main reason for this is that most of the OpEx and CapEx is not a percentage, but is a fixed number. For more on this, please read this article Serge and I wrote a while back.

I knew, therefore, that while offsetting my burn was most important to me, there must also be an appreciation component. Not only that, but I am rather risk-averse, and instead of asking, “Will I win,” I wanted to ask, “How will I win first?”

For this reason, I needed a blended house hack, with significant income potential and substantive rationale for appreciation.


Related: The Tax Implications You MUST Understand Before House Hacking

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Asset Class

I chose against multifamily. The competition for multifamily is fierce. You’ve got investors. You’ve got BiggerPockets-style house hackers. Both are willing to pay more than I think property is worth, specifically in a location I’d find attractive for my family. Besides, as has been discussed in the previous articles in this series, we weren’t looking to compress our lifestyle, and living in a 900 square foot apartment next to, under, or above a tenant is not exactly how you 10X your lifestyle. We wanted comfortable and luxurious.

So, multifamily was out.

But this seemingly left us with the single family asset class, which wasn’t going to work on the income side of the house hack equation. What now?

Multi-Generational Floor Plan

The idea is simple. Looking at the demographics of the Phoenix MSA, we realized that this was where young people came to work and older people came to retire. Combine the two, and the notion of a floor plan capable of accommodating both is not so far fetched.

He is coming down for a job. He’s got his wife and kids with him. His dad has passed away, but his mom is coming along. She will be living with them, but she needs privacy.

They call it a “multi-generational floor plan.” Imagine a main house with 3, 4, or 5 bedrooms and 2 or 2.5 baths—and a guest house, which may or may not be physically attached to the main house, but has its own bathroom and its own entrance and sometimes a kitchen/kitchenette. In the Midwest, we called this a mother-in-law suite, but in the Southwest, they call it a casita.

In my household we call it “cha-ching!”

Think about this, guys. The casita, in order to be any good, has to be designed for maximum privacy. Most often, what this means is that if it is attached to the house, it is attached by way of a garage wall, but doesn’t share any walls with the main house. Try doing that in a duplex.

There are other advantages. First, this is still considered a single family residence, which means the best financing terms for a mortgage. Second, the pool of buyers for a house like this is infinitely larger than for a duplex. Whenever you buy anything, you owe it to yourself to understand your exit. This type of footprint has lots of exits because the casita is actually very multi-purpose—you can do a lot with it. But most importantly, you will typically not find these in entry-level locations. These are well-located and well-amenitized homes. Think upscale—a world apart from that duplex your 24-year-old BiggerPockets friends are living in.

Related: Life Hacking in Pursuit of Financial Freedom: How I Add $1,500+/Mo to My Income

My Financial Guidelines

This is actually pretty simple. Upon leaving Ohio, we sold our house. It cost us about $1,350 per month to live in that house. We built it in 2006, and it was a fine house, but without the “finer things.”

I essentially wanted to scale up in the new location, but I wanted to keep my burn at $1,350 per month. I wanted to be in South Chandler because this is where the twins’ school is. But I think it’s fair to say that this submarket is one of the most desirable within a county with county-wide population growth at almost 2% each of the previous two years.

I wanted the pool in the backyard. I wanted the fireplace. I wanted the granite and travertine. I wanted mid-2000 or later construction. I wanted 11-foot ceilings, solid-core doors, and tile on the floor. I wanted high-grade Andersen windows and sliders. I wanted a big kitchen with stainless. I wanted a designer master shower in travertine.

Guys, this is all about the lifestyle. We were moving to live it up, not compress. I wanted it all, and I wanted it in a hot market—but I wanted it for $1,350 per month.

We Found the House!

We made a ton of offers on a ton of houses. I looked at all options, and then we found it.

The house was listed for around $380,000. It is in an area that ranges between $320,000 and $575,000. Patrisha had her license by then and represented us in this process. The first offer was $300,000. I am pretty sure I pissed some people off. I did not get a counter. 

The house sat for about a month, and the ask was lowered. I came back with a higher number. In the end, we went under contract at $355,000.

This is a 2,400 square foot house. There are 3 bedrooms, with 2 baths in the main house, within about 1,800 square feet. There is a room above the garage that makes for a brilliant office for both my wife and me because it is so private and quiet. There is a 2-car garage, a pool in the backyard, and a casita that is attached to the house by sharing a wall with the garage, but it is across a 25-foot courtyard from the main house, making it totally sound-proof and separate.

This casita is the rental, you guys. And because of the great location and the remodel I did, in spite of only being about 234 square feet, it is a very viable rental.

Again, there are a lot of specifics to fill in, but for now, let’s look at the results.


The Result: We Are Living Almost for Free!

We chose to go the short-term rental route. I’ll outline the rationale in the following article. As of this writing, the casita has been operational for about 6 months. We’ve got about $9,200 of cash flow (after fees) on the books. I am projecting that we will finish the year with about $15,000-$16,000 of cash flow.

My PI (principal and interest) on this very nice house is $1,708. All in, my burn totals about $2,050, plus or minus $50 per month. In the book, I go through the complete underwriting of all of the numbers, which took a lot of thought and market research. A very reasonable (and conservative) expectation for our average monthly cash flow is right around $1,300. Some months will be less and some much more. But on average, we should net $1,300 per month.

With this $1,300 rental subsidy against the PITI, our monthly burn delta should average plus or minus $750.

It’s All About Life Design

Guys, you can have anything you want, as long as it makes money!

My family and I are now living in a much nicer home, in a much more economically diverse town, in beautiful and sunny Arizona, where we have blue skies, palm trees, and sunshine almost every day of the year, for 50% of what it cost us to live in Ohio in a town you’ve never heard of and in a house half the size. We’ve 10X-ed our lives and yet cut our burn!


A few points to underscore and focus this conversation:

  1. You cannot rent a remotely decent apartment for $750 in Chandler, AZ.
  2. My tenants in Lima, OH are paying $700+ for my 2/1 apartments, and that’s Lima, OH!
  3. We came to Arizona looking to improve our family’s quality of life while keeping our burn down to $1,350 (same as it was in Lima). I am not sure, but I think $750 burn is better than $1,350. We are living in beautiful Chandler, AZ in a house almost twice the size, with a pool, granite, travertine, and all the rest for practically 50% of what it cost us to live in Lima, OH. Think about what we’ve done.
  4. As real estate investing goes, I’ve been playing the game for 11 years now, having bought my first property in 2006. I currently still manage a portfolio of rentals in Ohio. I promise you, this casita house hack is by far the easiest and most pleasurable cash flow I’ve made in real estate, ever!

Consider how difficult it would be to replace this $15,000 of cash flow with an investment property. Think it through with me:

  • In order to end with $15,000 of cash flow, the NOI would need to be at least $45,000, but probably more like $50,000. Out of that, you would pay about $2,500 per months of debt service to end up with $15,000 of annual cash flow. Consider what this would take to buy.
  • Capitalized at 8% (if you can even find an 8 cap today), this means you’ll pay over $550,000 for that NOI of $45,000.
  • You’ll most likely have to make a 25% down payment, which is almost $140,000.
  • And, you’ll have to manage that beast.

By contrast, this casita came with my house. It was free, people! There was literally no added cost. It is 234 square feet and easier to maintain than any other piece of real estate I own. It required no additional down payment aside for the 5% I put down on a conforming Fannie Mae note. Why? Because I am an owner-occupant and this is not a multifamily but is a single family dwelling. Best kind of financing you can get!

It produces the same income, but with much less headache than the multifamily. You choose!

And if you make the right choice, you 10X your life with luxury house hacking!

We’re republishing this article to help out our newer readers.

What are your thoughts on this strategy? Would you consider trying it? Why or why not?

Weigh in with a comment.

About Author

Ben Leybovich

Ben has been investing in multifamily residential real estate for over a decade. An expert in creative financing, he has been a guest on numerous real estate-related podcasts, including the BiggerPockets Podcast. He was also featured on the cover of REI Wealth Monthly and is a public speaker at events across the country. Most recently, he invested $20 million along with a partner into 215 units spread over two apartment communities in Phoenix. Ben is the creator of Cash Flow Freedom University and the author of House Hacking. Learn more about him at


  1. Well, that was a let down. I thought it would be a unique idea. There are about 1500 of those operations in my community, and the city is moving aggressively against them. Also based on my experience managing a high end expensive and well-booked vacation home, I would say your numbers are optimistic. However, you will live for free.

    • Ben Leybovich

      Yes, but some are more lenient than others. Also, the fact of it is that if need be, I’ll switch to long-term, and while making less money I am nevertheless going to be able to match my Ohio burn of $1,350. So, either way – mission of 10Xing our quality of life while no taking on higher burn will be handled. Makes sense?

      Thanks so much!

  2. Scott Trench

    The problems with your whole series here:

    1) This is not some secret that needed four articles to build up to. I happen to work here at BiggerPockets and will personally ensure that our readers are not subjected to a series to build up to this obvious point ever again. You get to make your point in one article, or not at all on this blog.

    2) You directly contradict yourself in this article. “I chose against multifamily. The competition for multifamily is fierce. You’ve got investors. You’ve got BiggerPockets-style house hackers. Both are willing to pay more than I think property is worth, specifically in a location I’d find attractive for my family.”

    Juxtapose that quote with this one: “There are other advantages. First, this is still considered a single family residence, which means the best financing terms for a mortgage. Second, the pool of buyers for a house like this is infinitely larger than for a duplex. Whenever you buy anything, you owe it to yourself to understand your exit. This type of footprint has lots of exits because the casita is actually very multi-purpose—you can do a lot with it.”

    You have absolutely no data that you share to support your thesis that there is more demand than supply for multifamily than mother in law. That is purely your conjecture. I’d argue the complete opposite, as would my buddy building Sterling Ranch here in CO Southwest of Denver. 0% of the inventory will be multifamily. 15% will be homes with mother in law suites.

    3) Your income is from short-term rentals. In many parts of the country (and counting), this income is only available WHILE LIVING in the home. So, depending on your location, you cannot move away and continue to airbnb the property. Props on Arizona. You can do that there. If you don’t live in a market that allows this, you had better be ready to rent the place out for a profit if you ever plan to move or want that flexibility.

    4) You have a new guest every couple of nights, right next door. Maybe 95% are great. Maybe 5% are bad. A house-hacker renting to long-term tenants has one tenant that they can remove and replace if they become annoying or a bad neighbor. I only choose good neighbors. I know which setup I prefer.

    5) You pay $750 to live, in spite of $1300 in income. Sure, you can claim that with loan amort and appreciation, you come out even. That means that the guy house hacking in less luxury has NO burn AND benefits from amort and appreciation. And, that can be done in nice areas too (such as the part of town where I live, next to breweries, shopping, a brand new shopping complex, and hundreds of brand new buildings).

    Bonus: I don’t call you out in my articles. And I don’t do vague aggrandizing about how I’ve stumbled onto some “secret.” I’d try the same if I were you.

    This style of living is no secret. It’s a great common sense way to live with a huge subsidy to your mortgage. Write a clear article like this one to demonstrate it, add your value, and move on to the next idea.

    • Ben Leybovich

      Scott – good comments. Let me start from the end:

      Of course this is not new. They’ve been doing this in Europe for a very long time. Every time I am in Italian or Belgium country side, renting a BnB is way nicer…

      1. I am not sure what you are saying in your first point.

      2. Not sure about the second point either. aside to say that the tenant class in mutli-family is a different animal, which effects economic losses.

      3. I live in a nice market, Scott, and there is a reason. Many people want to live in this market. And many want to vacate here.

      4. We’ll simply have to disagree here. I’ve seen good people turn very, very bad. I prefer that structure there is not a necessity for evictions here. I don’t like ’em – they are gone forever. Easy

      5. Actually, add tax advantages into the mix with that, Scott. Don’t you think I considered this, and don’t you think I would rather to have to have paid less?! I did what I did, and how I did for a reason and after a lot of thought. I may be wrong, but the decisions weren’t incidental.


    • Rich Schmidt

      Scott, if you really can ensure that we aren’t subjected to another string of teaser posts like this again, you’ll be making a lot of readers very happy.

      Ben, I might have enjoyed reading about your success with your casita rental situation… but thanks to all the hype leading up to it, it felt like a letdown.

      Renting out casitas or MIL quarters or ADU’s in/with nice homes in upscale neighborhoods isn’t new. But it’s still interesting. And if it hasn’t been getting much play here on BP, then it’s good to have someone bring it up to make sure people are considering it as an option.

      I just hope that next time, you’ll skip the hype and just share your story.

      • Ben Leybovich

        Rich, a couple of things.

        First – thanks for reading and stating your thoughts.

        Secondly – my opinion is that if I help (I mean really help) even one person, then the writing wasn’t in-vein. I know I’ve helped people 🙂

        Additionally – the commentary on these articles reveals that there are several segments to the BP audience. I am not and have never been interested in trying to be all things to all people. And, of course, the segment I write for is a fraction of the audience. The comments reveal that. I’m OK with that 🙂

        Finally – there is nothing new with buying a duplex and renting one side. I’ve been writing about it for a decade. Nothing new, yet it’s being written about a lot here.

        Aside for a different perspective on something, there hasn’t been anything new in real estate in hundreds of years. Open any Dumas novel and you’ll come across a BnB within the first 40 pages.

        That said, I appreciate your passionate attacks on my desire to state my perspective on house hacking (which I believe is different from anything that’s been written about before either on blogs or in books), but I might suggest that an easy solution is simply not to read 🙂

        • Rich Schmidt

          These aren’t “passionate attacks,” Ben. Just feedback that I thought you’d find helpful. I assume you’re interested in feedback on your writing so that you can improve it and connect with more people in the future. If I’m wrong about that, I apologize.

          My guess is that you could’ve written these same articles in such a way that you would’ve connected with more folks rather than frustrating and turning off a portion of your audience (which means turning away some potential buyers of your book). So feel free to listen and learn from the feedback you’re receiving from me and others… or feel free not to. That’s up to you.

    • Alan Majors


      The build up may have been cheesy, but not unheard of here at BP.

      Calling someone out publicly and threatening to use your position at BP on a member with a long posting history and a few podcast appearances should also be unheard of.

    • Sam McPeek

      Scott -If you ensure that no point made on Bigger Pockets takes more than one article, you will have to change many things. Of course you’d have to start by changing your own articles/podcasts leading up to the launch of your book. This is not the first time that Ben has posted a series of articles on BP with nuggets of information in each- leading to a main point (that you can see coming from article one). For examples, look at his articles on Return, or $30,000 pigs. It’s also not the first time that he has called out another face of Bigger Pockets in order to create debate. It was Brandon…and now it’s you.

      Ben is really good at creating discussion and debate, in order to get people talking. He does it without directly/overtly selling books. That’s good for BP…if it wasn’t Ben would not still be publishing on BP. Calm down, maybe take a lesson from Brandon on how to respond to Ben’s dry, sarcastic ribbing. It’s mainly done to create discussion, not derision.

  3. John Barnette

    To everyone’s point the math (cash flow and/or appreciation) is dependent on a pretty fair value for the property. My guess is that the true cash flow value of the casitas was not fully reflected in your purchase price. I have had the same fortune of buying “miss valued” property in the Bay Area. Likewise being young entry-level buyer without kids…hacking in a 2-4 makes absolute sense. Especially in an urban environment with suitble decent stock of buildings. A better investment than buying a new tiny box in the sky condo with granite counter tops and stainless appliances. Owner occupying and presumably fixing up an “owners unit” of a 2-4 is also exposing value (to the willing owner user) of a miss valued asset.

    I would add that in San Francisco taking almost any tenant occupied space and using for owner occupancy and spending time and money making sensible rehab will yield tremendous increased value. May be a difference of strategy between urban old city younger hip lifestyle living and a more family/school/space oriented suburban small town cool young parents kind of lifestyle.

    Each has its strategy.

  4. Jerry W.

    This is somewhat amusing. there were several points in Ben’s series of articles. One was Ben was having to justify changing some of the earlier things he said about lifestyle and was explaining why. (The technical tern is eating crow) Of course Ben was also doing a buildup to get interest. I used to hate it when the teacher would read only one or two chapters of a book in school, then wait for another day to read another chapter. I wanted to know what happened to Old Yeller now! When you do this folks often buy your book to read it now and get the whole story. Just like Scott did a podcast and wrote articles outlining how to use his ways of investing. you build interest to sell books. Ben does in his dry somewhat sarcastic humor take pokes at people. The proper way to poke back is in the same dry sarcastic humor. If Ben had published his book through Bigger Pockets I am sure there would not have been objections to all the lures in the last 3 articles to buy his book.
    It is really cool to see some sparring between you guys as you both invest fairly well but with totally different styles. I unfortunately side more with Ben’s method of investing as he has been investing much longer than you and and so has changed his view and methods over time in a way I can appreciate. Scott your style of investing is a VERY great way for young folks like you to begin investing. It is not for us old guys who have done it for 20 years or more. You have not faced the stagnant or reversing market yet. I suspect you have done less than a half dozen deals in less than a half dozen years. You will do great in your investing by following your path, but so will Ben using a completely different approach. Once you are married and have a few kids living at home your style will change a lot too if you want to stay married. One of the really cool things about BP is the huge diversity present in styles and experience. In only a few years I have changed the way I invest from when I started reading. There is a certain hype to what Ben writes that does not mention the time and money to set up a vacation rental and the specific problems they have, but he wants you to get the concept, not learn how many changes of sheets you need, and how often you must replace them. I very much appreciate that Scott will help many young folks get started into investing. Ben will not. Ben wants to take folks who have invested in 2 or 3 years in $30K rentals and show them a better and safer way to cash flow using multi units. There are no big multi units in my area, so I am intrigued with the vacation rental scenario. There is a LOT of frosting on Ben’s last few articles, but some pretty good cake too. I would very much like to see a lively debate between you two, I suspect it would be enlightening to many folks. Styles of investing must be tailored to where you are in life and experience.

    • Ben Leybovich

      Jerry – there are so many nuggets in your commentary that I don’t really know where to begin. In short, you get me, where I’m coming from, and where I’m going.

      A debate with Scott is not particularly an appealing proposition. I agree with Scott and a lot of his ideas. I thought the same way 15 years ago (aside for W2 income – never had that). When he says something I basically agree. As you’ve pointed out, my opinions have evolved from those early stages, but I can’t argue them with Scott because it just takes years and experience.

      There are 2 audiences on BP. One subset of people relate to Scott. Another relate get me. Scott’s audience is much, much larger. Doesn’t matter – I enjoy writing for the few who can relate to me 🙂

  5. Daniel Mina

    Thanks for this Ben. Im finding that in the end, house hacking is a game of math vs lifestyle. There are many ways to find a balance. Luxury house hacking is yours. Small multiunit house hacking is Scott Trench’s. For both of you, the math and lifestyle balance is acceptable at this time in your lives.

    • Ben Leybovich


      The difference is this:

      A: Find a deal the makes sense, and adjust lifestyle to accommodate.
      B: Determine your desired lifestyle, and make the housing work.

      When you’re young, A is an option. My writing and my book are for the 20% who are older yet still entrepreneurial 🙂

  6. Wilson Churchill

    I’ve been thinking about upgrading to a new residence for a while now. I’m still living with roommates in a bungalow that a paid 17k for I’m 2011 (worth over 100k now). The nicer areas around here are very expensive. You have me wondering if I can find something similar, though. I saw a nice fourplex, but it’s listed at 600k!

  7. Dave R.


    I loved this article — it’s genius! I’m doing a very similar thing right now. I am currently building a new construction project and am completely unapologetic about the level of finishes and design. I went for a completely modern design, mimicking some of what we see in high-end condo or apartment complexes; a full rooftop terrace with outdoor spa, a bocce ball court, marble countertops, etc. Am adding an Accessory Dwelling Unit (ADU) / full 1 bedroom which I will be renting out. The “all in” for the house is $470,000. The construction appraisal came back at $600,000, without the ADU. I was able to put $120,000 down, bringing the final mortgage at 4% + taxes/insurance to just over $2,100. Rent in the area (1 mile radius) ranges from $2,000 for a studio (~600 sq ft.) to $10,000 for a large 2 bedroom (penthouse, in a highrise… ~3,300 sqft.). I put out a couple of rent feelers with renderings of the ADU and I ended up with over 30 inquiries in a 24 hour period. Once construction is done, I fully plan on renting the ADU for $2,000/mo. bringing my monthly payments for the whole place to about $100/month.

    Keep it up, Ben!!

  8. Mark Spidell

    Nice article Ben! I have been doing the same thing since 2008. I gross about $30,000 annually doing short term rental with this listing:

    It works overall as I hire out the cleaning and some of the reservation work. The downside is that at the end of the day you are an inn keeper. 90% of Vacation rental guests are great, but even the worst of the bunch are better than a long term rental tenant that destroys your property. This was my first income property and it covers our mortgage, so I agree it is a house hack.

    • Ben Leybovich

      Agreed, Jeff. The only thing new is the perspective. The luxury component that work for families with kids is not something commonly associated with house hacking. If you think about, in most industries the “new” is a function of perspective. Take something like the Tesla I drive – talk about new. But – the battery is not new; the electric motor is sure as hell not new; the aluminum body is not new. So, what’s new? The supercharge network that allows that good old battery and motor to be viable.

      It’s all a matter of perspective in the end. Very few things can be invented…Makes sense?

    • Rich Schmidt

      Yep. You can learn this “new way” by watching HGTV. I’ve seen more than one episode of some show or other (my wife watches a few of them) over the past few years talk about casitas/MIL units and their rental potential. It’s not exactly a secret. Or new. But I’m glad it’s working for you, Ben!

    • Ben Leybovich

      Chris – are you really not able to recognize that the 4 posts were not about the actual buying? We teach you that finding a deal worth having is akin to finding a needle in a haystack, which it is. A house with a Casita, as you say, is right there in plain sight. It makes me more money than a 10-unit I own, which is and has always been a solid performer. And yet, in plain sight, people are missing that which I think is the best opportunity in this cycle.

      The reason we miss it, I think, is because we don’t dare to ask the right questions and be honest with ourselves. And this is what the 4 articles have been about 🙂

  9. Dave R.

    There’s quite a bit of salt in these comments. In this series, Ben challenges us to think differently about our investments and our strategies. Ben also discusses his desires, wants, and ambitions; it’s truly rare to see someone disclosing their desires for a luxury lifestyle. In recent years, the idea of luxury has somehow morphed into a bad thing – not only on these forums but across other mediums as well. If at the end of this series, instead of discussing luxury, Ben discussed that he was living in a shanty, like a pauper with his children and his wife, people would cheer him on as if he won the Superbowl. I’d imagine that this type of frugality is more relatable to the community.

    This same community backlash turns active participants into spectators. (Why would one continue to disclose their desires if their community turns against them?) I think folks need to take a step back and read through the lines instead of immediately jumping to a conclusion. It’s not a bad thing to want to do better in life, and it certainly isn’t a bad thing if folks want to reward themselves after accomplishing more.

    • Ben Leybovich

      Dave – thank you! You get it…

      The reason I write is to help a few people. I am aware that my way of thinking doesn’t jive with 95% of the BP – this is not a reason not to write for the 5% who are willing to listen.

      As to the scarcity mentality, you are right it is in-vogue. It is more relatable to this community, and therefore it is what sells 🙂

      I live with a diagnosis om MS. I do not have any W2 income that I don’t pay to myself. My effective tax rate is in the single digits. I work on what I want, with whomever I want. I fail lots. I succeed often enough… How relatable can all of the above possibly be to a community predominantly comprised of 24-40 year olds who think they are invincible (as, by the way, they should)…?

      I share my thoughts for the benefit of anyone who wants to listen. This is a minority, and I am cool with that.

      Thanks so much for leaving a comment, Dave!

  10. Sam McPeek

    Ben -The article series is great! After vacationing to the Oregon coast this summer with my in-laws (all 8 of us in one single family house), I told my wife that I don’t know how we’re going to do it yet but we are going to buy a beach house. Different from your model, in that we won’t live there full time but rather use it to pay for a vacation we otherwise couldn’t afford.

    The math works, so now it’s just figuring out how to come up with the financing. The hunt is on.

    We are also making plan to move on from our duplex house hack, in order to upgrade our lives. This is an idea that has crossed my mind, but isn’t widely available in my area. The hunt is on for that as well.

    I like reading your experiences and look forward to seeing more detail on the numbers (if Scott allows it of course!).

  11. Christopher Davis

    hello all!

    I connected with Ben after reading the book and he and his wife both lent us their time and expertise in finding a suitable “hack” on the other side of Phoenix. It was a bit of a trip hunting for a house with Ben and we managed to find an excellent prospect within a day of shopping. The numbers add up very well for this house and we shall soon see in any case as we have it under contract.

    Ben, Thanks for the help and the personal interest you took. 🙂


  12. Jaime Barragan

    Nice Post Ben,

    I have been thinking on how to make BnB work in El Paso, TX (far west TX; Phoenix is closer to us than Dallas).
    With a very similar weather, dry and hot, El Paso does not have the great economic activity as Phoenix. We are also not the best tourist destination.

    Having a “Casita” in a very desirable location is a strategy to consider. I will study the numbers

    Please, Keep posting more questions than answers; we can come up with amazing ideas/solutions between all of us.

    Gracias Ben,


  13. Jerry Thompson

    Appreciated the post Ben. This is about my 4th time reading it and I just noticed the comments. Jeez..! However I do appreciate the passion people have for RE here. Apparently this idea is nothing new, but FWIW I’m completely green to REI and BP and it’s been a valuable strategy to add to my arsenal/awareness, especially in my market. It took me another 50 random forum searches to notice this casita strategy mentioned even once, so again.. thanks from a rookie!

  14. Lazaro Vento

    The casita hack is amazing I had terrible credit so buying was off the table. About 2 years ago I know I needed to find a way to get free of the high rents in miami. I had bad credit but had some cash for larger deposits for big homes with guest house “casita” was able to get a large house in a nice area for 2,750 rent. The house lent itself for a 3rd rental unit, I was able to live rent free for 2 years. Now I have upgraded to a large 5 bedroom with pool with the extra income from renting the part of the old house I was living in and a smart divide in my downstairs bedroom am able to live in this house for 500 bucks a month. Still have bad credit and was able to get my dream house it’s possible guys.

  15. Anudeep Yapala

    Thanks Ben for sharing this idea. I honestly never knew about this idea, i was thinking of something similar and stumbled upon this article which reflects my thoughts.

    I have been going thru the comments and peoples views. All i have to say is it helped me concrete my thoughts
    and a coincidence that i am looking in Chandler area too and this article is right on.

    Thanks again and would love to meet you when in Phoenix area soon.

  16. Jeremy Lee

    I’ve been considering this but for actually having my in-laws living with us “as intended” lol. What are your thoughts on finding something that’s zoned R3 or R4 though where you could build out? That would be pretty expensive, I’m guessing.

    BTW: This is in Southern California, where everything and anything is overpriced, so if you have any SFH with a guest residence, you’re probably going to be overpaying for it whatever way you look at it.

  17. I really liked the article it backed up what I was thinking to do very soon. This is certainly not a new idea but I liked the way it was told and how a person used real estate to improve their lifestyle, nothing wrong with that!!! A single family home with a “casita” (BTW this word is not new and trendy! It means small house in Spanish!!!) Since Arizona is near a Spanish speaking border could this be the reason that the Realtors may in fact use this term, just like in Hawaii they use the word “lanai” … Jee wiz people!!!! Some of the people on this site seem to take everything so literal, this is a BLOG maybe you should only click on the articles that seem pertinent to you! If its not your thing then dont ruin it for the rest of us! If you have that much time on your hands to read and comment on every post that is not in your investing style, then you have way too much time on your hands!

  18. James Rutan

    If your big goal is to own a large luxury house there is a way. What about this! You find a gorgeous McMansion big enough for 2 families. You split the PITI via a 3rd party ‘loan manager’. ( Conversly if 1 family qualifies for the loan and sells 50% of the future value of the property to the 2nd family on payments.) Now, both families get to live in a luxury home for 50% off, build equity, and reap all the other benefits in of REI. It’s like a condo in a sense. One could still rent out the casita for added benefit. The only downside, You just have to find a family willing to live separately under the same roof as you.

  19. Charlene McNamara

    We’re doing this now and have several times in the past with other homes, first time in 2001. We go back and forth between having short term and long term renters in the small house. There are reasons both options are desireable. Right now we cash flow about $500/Mo renting the Airbnb halftime, meaning it pays our mortgage, plus taxes and insurance AND then we have $500/Mo in cash flow, which could easily be $1000/Mo if we rented it FT. So we’re beyond living here for free, we’re getting paid to live here! 2800 sq ft house 330 sq ft. Studio space ADU. It’s been such easy money we converted a large bedroom that had an exterior entrance, separate bath and separate sink into another rental. That one has a long term renter, which brings in even more money. These have brought us much more money than our other traditional investment rental properties AND have been much easier to manage. I’ve never understood why more people don’t follow this approach.

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