Latest / The Family Teams Podcast / Ep. 123 | Turning Your House into an Income-Producing Asset

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Ep. 123 | Turning Your House into an Income-Producing Asset · The Family Teams Podcast

• 0:00
  How important is this value that you create these income streams for your future multi-generational family? Hey guys, welcome to the 5-Minute Fatherhood Podcast. I'm your co-host, Jeff Bethke, along with my friend and mentor, Jeremy Pryor. Join us Monday through Friday as we chat about quick tips, skills, and ways to help equip you on your journey as a father to build your multi-generational family team on mission. Stay tuned.
• 0:31
  What's up guys, welcome to 5 Minute Fatherhood. We wanna talk to you a little bit about the topic of house hacking, and we wanna give you five ways to think about how to turn your house into an asset. And this is really coming out of a conversation that we're having, we've had with dads for years, but it's actually erupted recently in our five minute
• 0:49
  Fatherhood Facebook group. I encourage you guys to get in there and chat with the dads that are in there. We're talking a lot about how do we build assets? Because a lot of times we're talking to you guys about when you're building a multi-generational family team, it's really difficult to do that if you're not building some amount of income streams that are tied to your assets.
• 1:08
  your labor or your hours. And it doesn't have to be your entire income, but over time, as you get into your 30s, 40s, 50s, that should be ramping up. And there's a lot of reasons we get into about why that is. But a lot of times people get stuck and guys are like, ah, I'm out. I don't have any more time. There's no way for me to do this. And what they don't oftentimes realize is that basically what I've done, what Jeff has done, what a lot of dads have done, and I was actually surprised by how many dads in the Facebook group jumped on this and said, I'm not going to do this.
• 1:34
  oh yeah, we do this too, is that you take any asset that you have, anything that you're currently owning, and figure out a way, how can you make income from it? And obviously for most people, the biggest asset that they're developing is their own house. And it's a huge liability when they've got a big mortgage. And so they need to turn that into an income producing asset. So let me give you five things that we have done.
• 1:57
  and that others in the Facebook group have said about how to use their house to produce a second stream of income. So one is to buy a duplex. This is very forward thinking for a lot of people because you're not just thinking about your little starter house, but a lot of my friends, and I've done this, and some folks in the Facebook group have done this as well, they actually buy a duplex, rent out the other side, or they buy a triplex, a multifamily house,
• 2:20
  and they try to actually force the entire, as a unit, the house to produce enough income so that they can live mortgage-free. A lot of people have done that in our area that actually works financially for a lot of people. So that's something that a lot of guys that I know have done. Turning your house into an Airbnb or a VRBO where you're renting out your house to vacationers who are in your area. We've done this with multiple houses that we've had in the past. We had a house out in the country that we got up to, I think, $700 a night for a rental. So we would rent it out
• 2:47
  Sometimes for like two months during the summer, we'd go on an RV trip, come back, and our mortgage would be paid for the year. It worked out really well for us. So this is something we've done a lot, experimented with a lot. Rent a room in your house. We've done this a ton as well. You can find a room, put all your kids into one or two rooms. And if you've only got a three-bedroom house, we've done this a lot. A lot of people will not do this because they don't.
• 3:06
  want the privacy concerns, but again, this was a higher value to us, and we really wanted those people in our house for ministry reasons, which is the fourth thing you can do with your house is that is to turn it into a ministry center, right? So you can work on creating a lot of churches or ministries will give you a housing allowance if you turn your house more into a center for ministry, and so that's another way to sometimes create an income stream. And then the fifth way is care for an elderly member of your family in the house. And so we're going to have a lot of
• 3:32
  We had elderly members of our families in different nursing homes and places that were costing $2,000, $3,000 a month. And so different people in our family have done this. We've done this. And so these are just five ideas that you could use to try to turn your house into something of an asset. A lot of people, they put a box around their house and say, that's absolutely off limits. But again, this is really, it comes down to like how much...
• 3:57
  How important is this value that you create these income streams for your future multi-generational family? When some guys really get a hold of this, they actually begin to realize that that starts to flip. And the reasons why they're saying, hey, I need my house to be my castle and I can't let it be used for anything else. Other values start to trump that. And that's happened to us. And it's really been a blessing to us. But how have you guys tried to figure this out, Jeff? Yeah.
• 4:19
  Yeah, very similarly, I agree. And we actually have some, like I've told you, some plans in the future to kind of do something with Airbnb for that exact same reason. Two, I would say is, yeah, we've rent, I would say the biggest one we've done in here is we've had probably four or five or six people live with us over seven years of marriage and a handful of those had them pay rent. One little thing we do, like you said, is we don't do it purely to make money. We actually did it for ministry purposes or just to have them in the home or just, you know, Alyssa kind of discipling someone or whatever that is.
• 4:49
  But then just, and so then we would under market the rent. So then it's a blessing to them and a blessing to us, if that makes sense where they feel like, Oh man, I couldn't get this elsewhere. And then we feel like, Oh, well this is awesome. It's just helping us pay the mortgage or something like that. And so that's always kind of a fun way that we like to see it as kind of like ministry asset producing incomes, you know? Um,
• 5:06
  That's what that's another one. Another one I would say are two things I've heard, too, is one one. We didn't I didn't hear about this till after we already bought a house, but there's a real estate kind of guru where he kind of insists on, hey, don't buy your main house rent where you and your family live and then use all your money for income producing assets on other real estate.
• 5:21
  So use all your cash for rental incomes and cashflow properties right around you, but you rent only. And then that just totally lessens your liability. You know, your home is being rented and won't be taken from you, but then you can have income producing assets with all the cash and down payment that you use for something else. So that that was wise. And another one too, as a lot of people don't realize this, but like a little addition or like a little cottage in the backyard or something like that, you can even take out a home equity loan,
• 5:45
  a HELOC, you could take out maybe even a cash out refinance. But you know, you know, if you go up to even $100,000 for a little college cottage in the backyard, that's I think on average, a mortgage will cost you about five 600 bucks per $100,000. And you're going to be able to rent that thing for way more than that, right? So instantly, even if you don't even feel like it's in your home, you can do that.
• 6:03
  And so that's another thing, you know, we've even considered and thought about is just, you know, once we get some cash doing that or doing it through a, you know, mortgage or refinance or whatever, that there's ways to kind of actually cashflow parts of your home, uh, pretty quickly. Um, even if you don't think that, uh,
• 6:19
  you know, basically that more than exceeds the mortgage and that actually is giving you income and the lessons, your own personal mortgage. And so stuff like that. And I've seen friends do that where they, we call them Ohana's here in Maui or mother-in-law studios or cottages, whatever they're called. But that's another big one. And so those are what I would say is just, yeah. And it's not even like you have to do this, but I think if you have to be thinking through this lens and you have to be thinking through thinking and considering all these different options, because that then,
• 6:42
  is the something that compounds, like you said, in your thirties, forties, and fifties, and really sets up the team. Well, when you get to the finish line, because it's not about just doing it right now and striking rich, which I think a lot of people hear, it's more about actually just setting your team up well for kind of compounding the team, generatially speaking with assets and real estate and equity and all these different things. And so that's what we want to encourage you to think about today.
• 7:04
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