I paid rent today. I also collected rent today.
Ever since I moved to New York City, I’ve had this uncommon experience on the first of every month. It flies in the face of how society teaches us to adult.
The conventional thinking is that a person graduates from college, gets a job, buys a primary residence — without roommates, house hacking, Airbnb, or otherwise monetizing the property — and lives happily ever after.
Under the conventional approach, you pay for every housing expense out-of-pocket.
Sounds expensive.
And people are rightfully frustrated about how expensive this goal has become — for many people, at many income levels, it feels completely out of reach.
But people get so caught up in whether it’s affordable that we lose the bigger question:
Should you even want to?
Does it actually make financial sense to own your primary residence?
And beyond the math — isn’t this goal too narrow anyway? Why does the American Dream have to be defined this way?
Who does this conveyor belt thinking actually benefit — besides big builders and the consumer market that profits when we buy home furnishings and appliances?
There’s a better way to think about this. So let me propose an alternative.
Imagine this alternative scenario:
You either graduate from college, go to a trade school or vocational school, join the military, or start an entrepreneurial endeavor — or maybe some combination of the above.
You grow the gap between what you earn and spend, which is the foundation of all personal finance.
After a few years, once you’ve amassed some savings, you don’t just blindly follow the buy-a-home advice, nor do you lament about the fact that starter homes are unaffordable.
You recognize that pithy slogans like “renting is throwing your money away” are reductive, and a poor basis for a six-figure decision. And those slogans only serve the real estate industry, which is structured to make money based on commissions and transaction volume.
You refuse to get swayed by simplistic slogans.
Instead, you use math to guide your decisions.
When it comes to housing, that means calculating the price-to-rent ratio where you want to live.
You can look at the price-to-rent ratio of a city, town, or neighborhood in the aggregate. Or you could look at the ratio of a specific home in particular.
The real nerds among us will spend a Friday night analyzing both — and honestly, that’s not the worst way to spend an evening before making a six-figure decision.
The price-to-rent ratio is the price of a property divided by the annualized rent.
For example:
In Location A, a $350,000 home can be rented for $1,200 a month, which is $14,400 per year. The P/R ratio is 24.31.
In Location B, that same $350,000 home rents for $2,200 per month, which is $26,400 per year. The P/R ratio is 13.26.
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Here’s how to use this number:
If the P/R ratio is under 15, you might choose to follow the traditional path of buying a home — following the conventional American dream.
But if the P/R ratio is over 25, you pledge NOT to buy a home in that location, and decide to rent forever by choice.
You’ll save money as a renter as compared to being an owner — and you could invest that money in an S&P 500 index fund for what historically would have been a far greater return.
You could arbitrage the savings and retire earlier. (Here’s a deep dive on this topic.)
Between 15 to 25 is a gray zone:
— 15 to 20 is light gray, leaning towards buying
— 20 to 25 is dark gray, leaning towards renting (but if you’ll hold the property for a long time, buying is also a reasonable choice, particularly if other holding costs such as property taxes, insurance rates, and HOA fees are low)
Let’s imagine you live in an area where the P/R ratio is over 25. It makes rational financial sense to rent your personal residence.
But you have a deep desire to own a home anyway — maybe for the psychological benefits, the stability, or simply because you want to. What do you do?
You have two options. Either:
a) House hack your primary residence
or
b) Rent your primary residence. Buy rental property in a P/R < 15 location.
Let’s walk through both.
Option A: House hacking.
This is another way of saying that you’re going to monetize your property.
Maybe you buy a duplex, triplex, or fourplex, live in one unit and rent out the others.
Maybe you buy a single-family home that has a detached garage, accessory dwelling unit, or walk-out basement that can be converted into an autonomous unit. It’s technically not classified as a duplex, but it functionally acts like one. You live in one unit and rent the other.
Or heck, maybe you just get an old-fashioned roommate. This works well for extended families and friends: perhaps your brother or best friend (or both!) want to share the space, like Uncle Jesse and Joey in Full House.
Everyone’s comfort level and circumstances are going to be different.
But here’s the key insight: a portion of your home can actually produce income — rather than consume it.
This is how I got my start — and it looked nothing like the real estate TikToks would have you believe.
Years ago, I sat at my tiny IKEA kitchen table, running numbers with my phone’s calculator, some scratch paper, and the kind of skepticism that only comes after reading too many get-rich-quick blog posts.
I started my career as a newspaper reporter, earning the inflation-adjusted equivalent of $34,309 in today’s (2025) dollars; enough to cover rent and groceries but never quite enough to feel like I had real options.
I wanted choice.
The ability to spend my time writing, traveling, and building new projects without worrying if I’d make rent that month.
I needed a way of bringing in money that didn’t solely depend on my hours.
So I saved.
Every extra dollar I could squirrel away went into the proverbial piggy bank. My first property was a small triplex, which I renovated and self-managed. I shared one unit with three other people, and rented out the others.
Their combined rent meant that I had zero out-of-pocket housing costs. The mortgage, utilities, and even basic repairs (not major renovations, but little here-and-there repairs) were entirely covered.
I lived there for five years — zero housing costs the entire time. That’s the beauty of house hacking.
House hacking is one of two cost-efficient ways to get on the property ladder, even in expensive places.
But there’s one major drawback:
House hacking necessarily requires buying a property at the Venn diagram intersection between your personal preference and an investment — which means, typically, it’s an acceptable investment but not a stellar one.
The next option solves this problem.
Let’s look at the other option:
Option B: Rent your personal home; buy in a P/R < 15 area.
From a mathematical perspective, this makes the most sense.
When you’re buying an investment, you’re focused on the numbers — the return you’ll get relative to the level of risk you’re taking. You’re not falling in love with high ceilings or crown molding.
But when people buy personal homes, they do the opposite. They choose based on what they love, not what makes financial sense.
When you buy a house hack, you’re making compromises between what you personally would find acceptable and what would make the numbers work.
And often when a property tries to be both, it ends up being suboptimal in both dimensions.
You avoid this dilemma when you rent where you live and buy investment property based purely on the numbers.
This keeps emotion out of the equation, so your money can work harder for you in the places where it actually makes sense to own.
This is what I do today, as a NYC resident who is a renter by choice.
I also own seven rental units across Indiana, Nevada, and Georgia — all of which I’ve fully paid off (no mortgage).
And that’s why, on the first of the month, I simultaneously pay rent and collect it.
Here’s what I discovered: you don’t need to get everything perfect to succeed in real estate.
You just need to get the fundamentals right. The math. The systems. The patience to hold the property long enough for time and compounding to work their quiet magic.
That triplex became the start of a rental portfolio that, years later, gives me a steady stream of income whether or not I’m working.
It’s not about yachts or private jets. It’s about having the freedom to say:
Yes, I’ll take three months off to travel.
Yes, I’ll take on this project even if it doesn’t earn a dime at first.
Yes, I’ll choose work that excites me, not work I feel chained to.
That’s what real estate gave me: not wealth for its own sake, but choice.
Which brings me to the question I hear most often:
“But Paula … does real estate even make sense right now?”
I get this question constantly. And I understand why — you’ve seen the headlines.
High interest rates.
Prices that have climbed 47 percent since the start of 2020, according to the Case-Shiller Price Index.
And contradictory inventory patterns. (There’s simultaneously a severe housing shortage and also homes lingering on the market for far too long).
I understand why people are hesitant.
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But here’s what most people miss:
The best investors don’t wait for “perfect” conditions. They look for cash-flow positive deals, the kind that make sense regardless of what the Fed does.
That’s what I teach in Your First Rental Property (YFRP). How to analyze the math so you’re not speculating on appreciation, but building durable, long-term income that gives you options.
Because the truth is, there will never be a perfect moment. What matters is knowing how to find the right deal for you.
That skill is timeless. And once you have it, you’ll carry it forever.
That’s what YFRP is all about. It’s the course I would have wanted when I was sitting at that kitchen table with my phone’s calculator app, trying to figure out if this was even possible.
It’s a 10-week program designed to help you:
Analyze deals so you don’t buy a money pit
Find the right property — even if you’re investing out-of-state
Finance intelligently (because most of us don’t have piles of cash sitting around)
Build a team and systems so you’re not on call 24/7 for tenants
And it’s opening its doors to our next cohort later this month.
If you’re a busy professional who wants a clear, structured roadmap to your first rental — without wasting years and tens of thousands of dollars stumbling around like I did, learning from the School of Hard Knocks — YFRP was built for you.
Click here to get on the waitlist for the next cohort. You’ll be the first to know when doors open.
If you’ve ever thought, “I’d love to invest, but I don’t know where to start”, YFRP is the starting line.
And if you’ve ever thought, “Maybe real estate could be my ticket to freedom,” I’m here to tell you: it can.
Because you don’t need perfect timing. You don’t need a trust fund. You don’t need to wait for the market to calm down.
You just need a process. And a willingness to begin.
Talk soon,
Paula
P.S. The next YFRP cohort opens soon.
If you want me to send you the details, just click here to let me know you’re interested.
Or If you wish to binge on Real Estate topics, click here.
