How to Cash Flow Right Now!
Hi! I want to share a strategy I’m using to generate cash flow in today’s high interest rate environment. In my opinion, the easiest and least risky way is house hacking. But if you’re aiming for the highest return, short-term rentals can be a great option.
My current strategy is to find a single-family home with an "in-law" layout, something you can divide in two, add a separate entrance, and rent out the master suite or one half of the home on Airbnb while living in the other. I did this with our first property, and the rental income nearly covered the entire PITI.
Another option is to buy a home with a detached ADU or a duplex. This route is typically more expensive but offers greater comfort and privacy.
What to consider:
- 1. Buy a home without an HOA. You'll avoid potential restrictions and maintain more control.
- 2. Look for nearby cities with minimal short-term rental (STR) restrictions.
- 3. Target locations near universities, hospitals, and major highways. These areas attract more guests and give you the flexibility to switch to medium-term rentals if STR rules change.
Management tips:
Start by managing the property yourself. You can add a cleaning fee and coordinate cleanings using apps like Turno. If you’re busy and prefer a hands-off approach, consider hiring a local Airbnb property manager. Even after paying a 15–20% management fee, your net income can still outperform long-term rental income. Plus you will have the other side of the house available some days if you need it for family or friends.
In summary:
- Most accessible strategy: Find a single-family home with an in-law layout, live in one part and rent the other. After a year, rent both sides.
- More comfortable route: Buy a duplex or a home with an ADU in a STR-friendly area and do the same. Hire a manager if convenience is a priority.
Now is one of the best times for buyers in decades. If you can cash flow with this strategy for the next few years, you’ll be in a strong position when rates drop, rents rise, and home values increase.
I’m a local realtor and house hacker in the Austin area. If you’re interested in trying this strategy, feel free to DM me, happy to help!