3 Creative Ways to Offset Your Cost of Living

With its stunning landscapes, warm climate, and vibrant community, St. George is a dream location to own a home. However, finding a way to own a home as cost of living rises can be a challenge. We have 3 creative strategies that can help you reach your homeownership goals. 

House Hacking

House hacking can be done in a few different ways. It means buying a home and renting out part of it, whether that's buying a duplex, a home with an apartment, or just renting out a room or two in the home. 

One of the most straightforward ways to house hack is by purchasing a multi-family property, such as a duplex, triplex, or fourplex. You can live in one unit and rent out the others. This setup allows you to leverage rental income to pay down your mortgage faster. You may also find that securing financing for this type of property is easier because lenders factor in the expected rental income. 

If a multi-family property isn’t feasible, consider renting out individual rooms in your single-family home. This approach works well for those who don’t mind sharing common areas like the kitchen and living room, especially if you have someone in mind. 

Rental income can significantly reduce or even eliminate your monthly mortgage payments, especially if you buy a multi-family property. This is one of the most profitable strategies for making homeownership affordable.

Co-Buying

Co-buying means buying a home together with another buyer, either a friend, a family members, or just a co-investor. This strategy allows you to share the financial burden of homeownership, making it more accessible and affordable.

There are multiple ways to divide the investment between two parties. The most straightforward co-buying relationship is usually two parties splitting all expenses equally and living in the home together. In other cases, multiple generations of the same family might move in together, with one party providing the down payment and the other making the ongoing mortgage payments. 

There are 3 things to remember if you're consider co-buying. First, the co-buyer you choose needs to be someone you trust and who shares similar goals and financial stability. You need to be able to communicate openly and honestly with them. 

Second, your agreement needs to be in writing and you need a real estate attorney to help you draft a contract that outlines how ownership will be handled, including an exit strategy.

Third, make sure you talk with lenders who are experienced in co-buying. All parties will need to qualify for the mortgage, and lenders will evaluate each co-buyer’s credit score, income, and debt-to-income ratio. As with any real estate investment, it's best to talk with more than one lender to see who can offer the best loan.

Renting Out an ADU

An Accessory Dwelling Unit (ADU) is a secondary housing unit on your property. It can be a detached structure, an attached addition, or a converted part of your existing home, such as a basement or garage. Renting out an ADU can generate additional income to offset your mortgage and living expenses.

In St. George, there is strong demand for small rentals both by college students and tourists. You can opt to run a short term rental in your ADU, which will require more maintenance and management, but justifies a higher nightly rate, or opt for a long term rental that becomes a more passive source of income. 

Adding an ADU can also increase the overall value of your property, providing a higher return on investment when you decide to sell. If you're able to buy a home with an ADU or finance the construction of one on the property, it can greatly offset the cost of homeownership. 

Whatever strategy you decide to employ, we're here to help you reach your goals in real estate. Even when market conditions aren't exactly what you had hoped, homeownership can still be within reach.

Devin Stephens with Canmore Real Estate Group explains why finding creative ways to invest in real estate is worth it, saying, "Finding creative ways to invest in real estate is worth it because innovative strategies can turn financial barriers into opportunities, unlocking potential for growth, stability, and long-term wealth."

Ready to learn more about buying a home in St. George? Contact us any time.