A Los Angeles couple wanted off the busy streets and into a quieter place with a real yard for their young son. The only way the numbers worked was to become landlords. Instead of chasing a classic single-family house with a sky-high monthly payment, they focused on properties with an extra unit already on site or enough space for an accessory dwelling unit, and they baked potential rent into their budget. In short, their strategy was simple: build or borrow to add something rentable, then use that income to help close the city’s stubborn affordability gap.
As reported by The New York Times, lender Lauren Plaxco and her partner, Bryan Keith, searched in Highland Park, Van Nuys, and Reseda with a price range of roughly $750,000 to $1.3 million. They prioritized listings that either included a separate unit or could reasonably fit one. The profile walks through their search and the tradeoffs they faced, including higher property taxes, renovation costs, and the day-to-day reality of being landlords. Their experience shows how one family turns a single house into both a home and an income stream.
Renovation loans and rental math
Specialized renovation mortgages are what make this strategy possible in the first place. The FHA’s 203(k) program and Fannie Mae’s HomeStyle Renovation loan let buyers fold rehab and construction expenses, including building an ADU, into a single mortgage instead of paying out of pocket and then refinancing later. According to HUD, the 203(k) insures loans that cover both the purchase or refinance of a home and the cost of renovations. Fannie Mae allows HomeStyle funds to be used for accessory dwelling units and other upgrades, effectively moving the upfront cash hit into long-term debt that rides along with the main mortgage payment.
The listings that make the numbers add up
The New York Times profile spells out how the math looked on specific properties. One Highland Park home was listed near $1.175 million, with an existing separate unit that could bring in an estimated $3,500 a month in rent. A Van Nuys house came on the market for about $835,000, with a projected $3,400 per month from a future ADU. In Reseda, a roughly $779,000 cottage penciled out with an estimated $3,200 in monthly ADU rent.
The same report noted that building a two-bedroom ADU in the San Fernando Valley can run around $300,000, and that annual property tax bills for those example homes ranged from about $9,200 to $17,000. Those figures formed the baseline for the couple’s spreadsheets as they tried to see whether rental income could reasonably cover the mortgage and ongoing costs, not just in best-case scenarios.
City rules and the ADU push
Los Angeles has tried to clear the path for backyard units, and the Department of Building and Safety now offers standard ADU plans and a more straightforward process for common designs. The city’s guidance materials lay out how the standard-plan program works and who qualifies. At the same time, a Los Angeles Times analysis finds that ADU construction has surged and notes that many units still cost hundreds of thousands of dollars to build. So permits might be easier to get, but buyers still have to swallow serious construction bills if they are counting on that extra rental unit.
Tradeoffs for would-be landlord-homeowners
Letting a tenant help pay the mortgage can take the edge off a brutal monthly bill, but it essentially turns the house into a small business. That brings landlord responsibilities such as ongoing maintenance, handling tenant turnover, keeping up with insurance, and covering the hit from any vacancy stretches. FHA 203(k) loans typically require the borrower to live in the property as a primary residence, which limits who can use that program to fund an ADU, and renovation loans layer in more paperwork, escrow draws, and inspections along the way. Buyers considering this path are advised to run the numbers with conservative rent estimates, build in a vacancy cushion, and plan for management costs instead of assuming rental income will flow smoothly every month.
For many Angelenos, owning a home now means doing landlord math as part of the dream. If you can buy or build a place where someone else helps cover the mortgage, ownership can move from fantasy to feasible, although it is anything but effortless. The New York Times profile ultimately offers both a playbook and a warning: the combination of loans and rents can line up, but the price of admission is stepping into the role of small-scale landlord almost overnight.
