After losing her tech job, Texas resident Lauren Patton struggled to keep up with a mortgage payment of about $4,000 a month. Rather than sell, she spent roughly $8,500 to build a cabin of about 100 square feet in her backyard, moved into it and listed her main house on Airbnb. Rental income helps with costs but still falls short of covering the mortgage, leaving her to balance housing expenses, repairs and uneven earnings.
Layoff left Patton facing a $4,000 mortgage
Patton moved back to Texas from Chicago in 2022 and bought a roughly 1,000-square-foot, two-bedroom bungalow in central Texas for about $400,000. She bought the home on her own with a relatively small down payment and took out a 30-year mortgage, with monthly payments of about $4,000. At the time, she worked as a data science manager in the tech industry and believed her income could support the expense.
In early 2023, amid a wave of tech layoffs, Patton learned she had been let go the day after returning from a trip to South Africa. She received two months of severance. At first, she expected her data science management experience would help her find another job quickly, but several rounds of interviews did not lead to an offer. With limited savings and credit card debt, she applied for unemployment benefits and listed her house on Airbnb to help cover the mortgage.
To make the home available to guests, she rented a place across town for about six months. After her unemployment benefits ran out, she spent a period sleeping on a friend's couch and drove for Lyft to make ends meet. In 2024, she contacted a former supervisor and returned to her previous accounting work, at a substantially lower salary than in tech. She also tapped her 401(k) and continued to worry about foreclosure. The home's value had fallen, and she estimated she was about 30% underwater, making her reluctant to sell.
A backyard cabin cost about $8,500
At 35, Patton decided to build a small cabin in the backyard. With little carpentry or construction experience, she bought a cabin kit she had seen on social media and borrowed about $8,500 to pay for it. During construction, she moved back into the main house and rented out one bedroom for about $1,200 a month to help with the mortgage. She later said that a two-bedroom home offered limited rental space and that a larger number of rooms might have brought in more income.
The cabin is about 100 square feet. The kit included planks, beams and large windows, but not a roof or floor. Patton also built a foundation, a basic outdoor toilet and shower, and added fencing and other features to the yard. She used YouTube and ChatGPT to find construction guidance, but said advice about the roof sent her down the wrong path. The project was largely complete by March 2025, though she has continued making adjustments.
After moving into the cabin, Patton began renting the main house on Airbnb year-round and has hosted hundreds of guests. She lets the platform manage pricing. Rates are about $200 a night on a typical weekend and around $125 on weekdays during the school year. October, when Austin limits music festivals, is usually a busier month. The home was about 96% occupied that month and brought in $6,516.70 in gross revenue. That was not typical: Airbnb charged $619 in service fees, and Patton arranged seven cleanings at about $100 each.
Rental proceeds go toward the mortgage and cabin expenses, but do not cover the full mortgage payment. Higher home insurance costs have added about $400 to her monthly payment this year. Electricity and other utilities for both the main house and cabin total about $550 a month.
Limited space and rental income leave little margin
At first, living in the cabin felt claustrophobic to Patton and made her feel as if her life had gone backwards. It has a television, desk and bed, but only a small refrigerator, no ice maker and no running water. She has to keep bottled water on hand. When she first moved in, she used a portable air conditioner and indoor humidity reached 80%; she often woke up soaked in sweat. She now runs a dehumidifier around the clock.
The tight quarters also make everyday tasks more complicated. Realizing she is out of salt while cooking, leaving something in the main house or having to make an unexpected shopping trip can prompt her to question whether the arrangement is actually saving money. Patton said she has tried everything she can think of to keep the house. If circumstances do not improve over the next few years, she is willing to consider selling.
Looking back, Patton said she did not fully research the costs of buying a first home. The house is about 100 years old and frequently needs repairs, and she underestimated the time and energy required to maintain it. For a future purchase, she wants mortgage costs to stay below 30% of her income and plans to make more realistic assumptions about her earnings.
Patton now combines data analysis projects with dog walking, but her work income still does not cover the mortgage. She recently shared her layoff and backyard-cabin experience on social media, adding about 12,000 Instagram followers, but has not yet earned money from short-form video content. She hopes to move back into the main house if her finances improve and rent the cabin at a lower rate. For now, she relies on work and short-term rental income to maintain the property.