(MONEY Magazine) – BY RUSS FLANAGAN, 35, JOHNSTON, R.I.

"When my wife Sonja became pregnant, she wanted to be a stay-at-home mom. That wouldn't be easy: My salary as a state employee wouldn't be enough once Sonja quit her bank job, so we started investing in rental properties.

In October 2002 we sold our two-bedroom home to finance our first rental purchase--a $189,000 three-family house. We moved into the top floor and rented out the rest. We picked out a place in a slowly gentrifying neighborhood near one of the local universities--which meant there'd be plenty of students looking for a place to live. In March 2005 we bought a second multifamily house nearby for $265,000.

By the fall of 2005, we saw that properties were staying on the market a little longer than they used to, so we decided to sell our first house. It went for $349,000--85% more than its original cost. When I decided I wanted to go to grad school, we sold the second property for a tidy profit.

Being landlords for four years has allowed us to pay off our $11,000 in credit-card debt and buy our dream house--a three-bedroom colonial. We've also amassed enough savings to remain a one-paycheck family. The rewards are more than just financial, however: We now have the family life we always dreamed of."