July 31, 2021

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The Secret to Retiring Before You’re 40, According to Someone Who Did It


Early retirement sounds like one of those dreams that rarely come true. But Bryce Stewart, a sixth grade school teacher and father of four girls, figured out how to do just that. Now he and his wife, who are not yet 40 years old, are half retired and sit on a $ 1 million portfolio. The secret? Multi housing Real estate investment.

It is probably no surprise that owning a rental property is a good first step in generating passive income, and ultimately achieve financial freedom. But while you might think that if you don’t have a boatload of cash to lay out ahead of time, it isn’t impossible, as Stewart proves. “A house is yours largest monthly expenditure and the greatest asset you are likely to ever own, so your first home purchase can mean the difference between financial freedom and financial ruin, ”he says.

After learning the hard lessons of investing in multi-apartment real estate, Stewart wrote a book on the subject called House Hackers Guide To The Galaxy: Use Your Home To Make Millions And Retire Early. Read on for his best tips that he shared with best lifeto make money without really trying. For more little ways to save your hard-earned cash, see 17 Smart Ways Businesses Are Getting You To Spend More.

amazing home facts

Newer properties are usually sold at a premium. This leaves very little room for appreciation in the short term. The Stewart’s first purchase was in a frothy market and they bought a brand new luxury condo. “The value really had only one direction to go – down,” says Stewart.

Investors are buying properties that are still “meat on the bone” where improvements would increase resale value, he explains. “New buildings are usually valued at the high water mark when they are bought, so that there is not much room for future profits.” You can find more tips on buying a house at According to realtors, the # 1 sign that you shouldn’t buy this home.

Middle-aged couple paying bills

Calculate your potential monthly transportation costs. This number is usually the sum of the mortgage payment (principal & interest or P&I), property taxes (T), and homeowner insurance (I). The PITI is that Firmly Carrying costs of home ownership. For a condominium, provide your monthly Homeowner’s Association (HOA) fees. Then research the prevailing rents in your market for a house like yours. If the PITI total is higher than comparable rents and you are forced to move within a few years, you may lose money from what happened to the Stewarts.

“We bought a one bedroom apartment. Two years later, we realized that we were expecting a child and that we had to move to something bigger, ”says Stewart. “We owed $ 152,000 and similar units sold for $ 85,000. So we couldn’t afford to sell. “Stewart was considering renting the apartment to a tenant, but the highest reasonable rent was $ 1,100 and his monthly running costs were $ 1,400, so he found he was losing $ 300 a month.

If the Stewarts had shopped wiser, they could have bought a three-bedroom home for $ 120,000 to $ 140,000, with monthly transportation costs closer to $ 1,100. Two years later, if they had to move, they could easily have rented out a home like this to renters for around $ 1,300 a month. “Instead of to lose $ 300 a month we could have owned a property that earned $ 200 per month in additional income, which would have been a difference of $ 500 per month, ”he says. For more ways on how to secretly throw away money, see This is the biggest waste of money that you are spending without even knowing it.

Real estate background photo from Dorchester showing apartment buildings and apartments.
Michael Moloney / Shutterstock

Smaller apartment buildings offer you the opportunity to collect rent and offset operating costs while you live in the property. The Stewarts’ second purchase was a maisonette. “The total monthly cost of ownership was around $ 1,200,” explains Stewart. “But we moved into one of the units and a tenant lived in the other unit. The rent was $ 600, which paid half of our costs and drastically reduced the amount of money we had to raise for our own apartments. That was crucial as we quickly had two daughters to look after and a $ 300 monthly loss from our first apartment. “

The Stewarts bought the maisonette on a US Federal Housing Administration (FHA) loan that only required a 3.5 percent down payment. This type of loan product is only available to buyers who are purchasing a condo and not to buyers who are buying for investment purposes only.

“Because we were ready to temporarily live in one of the units in the duplex, We were able to buy the property for a very low cost, “says Stewart.” We stayed for a few years and slowly improved both the unit we lived in and the other unit. We have now moved out and this duplex is generating over $ 1,200 a month in excess profits. “Get more tips on finance, home ownership and more right in your inbox. Sign up for our daily newsletter.

Couple signing house contract
Rob Daly / iStock

If your circumstances permit, repeat the above steps. Buy and live in an apartment building, make it beautiful, rent the units for a monthly profit, and move to another house to start the process over.

The Stewarts’ experience with the duplex convinced them to buy a triplex next. “It was’nt easy. However, our initial experience has shown that renting out apartments can give us a steady income, ”says Stewart. “So we did it again. When we moved out of the triplex we were ready to settle in a single family home near an elementary school for our daughters. Duplex and Triplex made a combined profit of $ 3,000 per month. We used those profits to pay the $ 1,500 PITI for our family home and pocketed the remaining $ 1,500. That really allowed us to start saving money. “This put the Stewarts on a strong path towards financial freedom and now retired and a $ 1 million portfolio. And to learn more about the best places to go once you have financial freedom, According to the data, this is the best state to retreat to in America.