J
oe Christiano wanted to help his sister and her partner buy a home in the Bay Area, where rentals and purchases are prohibitively expensive. They were looking at houses in the $800,000 range with structural defects, but Christiano had an idea after reconnecting with an old high school friend, Niles Lichtenstein, who launched a startup called Nestment that helps priced-out buyers achieve homeownership through unconventional means.

    Nestment equips buyers with tools to make co-buying arrangements formal and accessible. Christiano's extended family ended up checking both boxes - buying a duplex with long-standing tenants and splitting the mortgage payment with his sister and her partners, who live upstairs. Lichtenstein says the idea for Nestment came from his mother, a widowed immigrant who took in international grad students as boarders to pay the bills.

    When rental income is taken into account, financing a multifamily property like a duplex or triplex can be cheaper than buying a single-family house. This approach creates a more sustainable path to homeownership, Lichtenstein said. Fostering ownership is also a priority for cities, states, and counties that sponsor nearly 800 down payment assistance programs.

    At Neighborhood Housing Services of New Britain, many clients start out trying to buy a single-family home but find it tough with their approved financing. They switch gears and consider becoming landlords instead. Assistance with down payments often comes with a requirement that recipients complete landlord training. This helps weed out buyers who might not be up for the task.

    For Christiano and his sister, being landlords has been a positive experience. They enjoy fostering relationships with their tenants and appreciate the rental income. However, working with a startup like Nestment or a housing counselor can be helpful in understanding the finances involved. The most important question is whether rental income can be used to qualify for the mortgage, which varies depending on the type of loan.

    Christiano found it useful to have Nestment confirm that the property would not function as an income-producing investment. In his case, the mortgage runs approximately $5,000 a month, and the tenants pay rent equivalent to about half that amount. Property taxes are another $1,500 or so a month, but Christiano is still comparing options for property insurance. He's enjoying the experience of being a landlord and appreciates the rental income, which makes him feel good every time he receives payment.