Hi everybody, welcome back to the WIIRE podcast! We are so excited to welcome our friend and real estate investor, Jessie Dillon, to the show this week! Jessie is not only a member of the WIIRE Community, but has attended two of our retreats, and today she is going to be telling us all about how she rents out a room in her home as a mid-term rental.
Jessie is based in central Massachusetts and rents out the room in her own home as a house hack, and aside from her REI business she owns a beauty business and is a wife and stepmom. Jessie has grown her REI biz to 5 doors and in 2022 alone grew her portfolio from $0 to $1.5 million!
Why rent by the room?
Jessie started investing in real estate in January 2022 and at the time lived in an extremely reasonably priced apartment with a fantastic landlord. While he was a great landlord, he owned multiple properties, causing him to not pay super close attention to each individual property. Jessie decided that she would only move and increase their cost of living if it was the absolutely perfect situation.
Eventually, Jessie found a duplex property on Zillow that had been listed for roughly one month and was only one mile away from their apartment. After looking at the numbers they went all in on it and by that evening had signed an offer (in a smoothie shop, nonetheless) for the property. It was in a great neighborhood, half of it was newly flipped and the listing agent was also the owner who had done the work. It was so easy - no one else really even needed to be involved. They purchased the property in July and moved in at the end of August.
Right away they got a long-term tenant for the other half of the duplex and they began tossing around the idea of renting out their guest room as a mid-term rental. They debated whether they wanted to share their personal space with a complete stranger and eventually decided that the potential income it would bring in was too good to pass up and they should at least try it out. Within 6 weeks they had a tenant locked in.
How much does your tenant pay in rent?
Their monthly mortgage payment is $3,850, and between the income from the other half of the duplex and their mid-term tenant, they only have to cover $50 of that monthly mortgage payment. They basically are getting $700 per month of principal paid down, with their $600K asset appreciating (in a high-appreciation state), and them only paying $50 towards the principal interest, taxes, and insurance, it’s just too good of a deal. Jessie and her husband purchased the property for $590K using an FHA loan and also a private investor from their circle.
Next came furnishing the unit. Jessie kept it super simple and while she considered going the normal marketplace route, she opted to go with mostly new items because that way if the in-house mid-term tenant thing didn’t work out, she would at least have a super cute, furnished guest room.
So, how is it working out having someone else live in your space?
Actually, great! She shares our space respectfully and we get along great. They did a full background check, social media search, Facetime calls, formal lease, etc., the same as they would for a short-term tenant or a mid-term tenant in a separate property. It’s been about 6 weeks and she actually might extend it out further. Jessie listed the property on both Airbnb and Furnished Finder. The tenant pays $1,700 per month, which includes everything, including ‘light pet care’ and laundry service since Jessie works from home (creative bonus income!).
If you want to know about Jessie or connect with her personally, send her a DM on Instagram!
Thank you for joining us this week, we’ll catch you in the next episode!
Resources
WIIRE 120: What Should You Be Looking For When You Do a Property Walk-Through?
WIIRE 119: Balancing CEO and Stay-At-Home Mom Life with Kristen Witalka
WIIRE 118: What Financial Tasks Should I Be Doing Weekly, Monthly, & Yearly in my Rental Business?
WIIRE 117: Small and Mighty Real Estate Investing with Chad Carson
WIIRE 116: How to Use Free Marketing for Your Rental Business
WIIRE 115: How to Implement the Entrepreneurial Operating System in Your Business with Maya Bovshow
WIIRE 114: Our CEO Roles as Full Time Real Estate Investors
WIIRE 113: Fourplex From Hell: Resilience as a Rookie Investor with Katie Hofer
WIIRE 112: Legal Contracts You Need in Your Real Estate Business
WIIRE 111: Lessons Learned While Self Managing Rental Properties
WIIRE 110: Ask A&G: Midterm Rental Frequently Asked Questions
WIIRE 109: House-hacking New Build Homes Tax Free with Monica Fullerton
WIIRE 108: Best Tenant Screening Practices
WIIRE 107: Starting Your Real Estate Journey At Any Age with Liz Connelly
WIIRE 106: Increasing Your Profitability without Buying More Real Estate
WIIRE 105: Midterm Rental Operations with Jamie Banks
WIIRE 104: Handling Maintenance Requests Like a Pro
WIIRE 103: Midterm Rental Co-Hosting and Credit Card Hacking with Jaina Pallasigui
WIIRE 102: What Can You Expect At A WIIRE Retreat?
WIIRE 101: Serial Real Estate Entrepreneur with Erika Brown
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