What do you see in this picture? An open walkway? An awesome picture of me jumping off a ledge in front of the Colosseum? A random room with some stuff in it?
I would agree with each of those things, but I saw opportunity! Opportunity to turn my current living situation into an even more profitable one.
How I Saw Opportunity!
Opportunity is all around. Some see it while others walk by it every day. As some of you know, I currently house hack my home. House hacking means I rent out parts of my home to individuals seeking a place to stay for various amounts of time. I live in the master bedroom of the home and rent out the other two bedrooms.
Here are the current numbers for my house hacking:
- Mortgage $1,777
- Utilities $180
- HOA $152
- Renting Bedroom #1: $975
- Renting Bedroom #2: $900
So with renting two bedrooms alone, I am more or less living for free while paying off my mortgage. Not too bad right?
Wrong! I saw an opportunity to bring in even more income!
Opportunity Knocks When You Are Looking!
One thing I haven’t taken full advantage of was a side room I had vacant. This room is a walk-in room having no door (as shown in the picture). The other day I was thinking to myself, what if I framed a door in the walkway and created another private bedroom?!
Doing this would do two things:
- This would add value to my home by the creation of another room (soon could be bedroom) once I add a closet
- I could then rent out the room for an $600-700 a month!
Sometimes you have to look at things in a different perspective.
So what did I do?! I started exploring options to get a door and drywall in place to create value! I reached out to the General Contractor I am now using for my Airbnb to get quotes for the work. Total, my GC told me it would cost $700.
Two days later and wa la! Checkout what that old walkin room now looks like!
I now believe I can rent this room out for between $600-700 per month.
How I Am Making A Return On Investment (ROI) In 1 Month!
For most, the concept of a return on investment is foreign. Most investors want to understand what return they are going to make on their money or how long it will take to payback. This allows you to understand how well your money is working for you.
In this scenario, here is how I calculated a ROI of 1 month!
Total Cost of creating the room: $700 of material and labor
Total Income From Room: $700/month
From these numbers you would divide the $700/$700 = 1 month! Yes, that is right! The $700 invested will pay back that exact amount the first month I rent the bedroom out! How incredible is that. If you were to give someone a million dollars and they returned it the next month, would that make you happy? That is how I am feeling right now!
Had I not looked at my home a different way, I would have never seen this opportunity!
- You walk by opportunity every day. Some see it while most don’t.
- Understand what your return on investment is. From my world, any return on investment where you can make your money back in less than 2 years is a no brainer. Period. The fact this pays for itself in a month is AMAZING!
- House hack! It is the most amazing thing that is available to anyone. Yes, that means you.