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I have found a couple of homes that appear to fit what I'm looking for, on paper at least. However, both homes also have a 2/1 garage apartment. One of them is actually over a detatched garage while the other is detatched but either used to be the garage or is just being called a garage apt instead of a guest house since it's rented. Without the garage apartment, neither house would be worth the asking price but are still within my budget without any help from rent.
Obviously there is the benefit of rent but I figure the insurance cost is going to go up as well, right? Plus the issue of any repairs the apt should need, either because something broke while people live there or because it needs fixed prior to someone moving in. And the headache of renting the place out to begin with, or perhaps worse, evicting folks. Is this more trouble than it's worth?
I haven't been inside these places, just debating if it's even worth considering as a first time homebuyer.
I have found a couple of homes that appear to fit what I'm looking for, on paper at least. However, both homes also have a 2/1 garage apartment. One of them is actually over a detatched garage while the other is detatched but either used to be the garage or is just being called a garage apt instead of a guest house since it's rented. Without the garage apartment, neither house would be worth the asking price but are still within my budget without any help from rent.
Obviously there is the benefit of rent but I figure the insurance cost is going to go up as well, right? Plus the issue of any repairs the apt should need, either because something broke while people live there or because it needs fixed prior to someone moving in. And the headache of renting the place out to begin with, or perhaps worse, evicting folks. Is this more trouble than it's worth?
I haven't been inside these places, just debating if it's even worth considering as a first time homebuyer.
No idea, how would I find something like that out? I assume by legal you mean something along the lines of permission to build them in the first place? I know one of them has a postal address, is that an indication? Both have their own utilities so I would guess the other has a postal address as well now that I think about it.
No idea, how would I find something like that out? I assume by legal you mean something along the lines of permission to build them in the first place? I know one of them has a postal address, is that an indication? Both have their own utilities so I would guess the other has a postal address as well now that I think about it.
Where is the house? In my location and most of the northeast, almost all of these garage apts, basement apts etc etc violate zoning laws. If your house is zoned for single family I doubt its "legal". To have that I think they must be zoned for multi family.
But both of those points(utilities and mailbox) suggest(but not 100%) that they are legal
No idea, how would I find something like that out? I assume by legal you mean something along the lines of permission to build them in the first place? I know one of them has a postal address, is that an indication? Both have their own utilities so I would guess the other has a postal address as well now that I think about it.
You need to check with the city or county for how the property itself is zoned, and whether the zoning allows a rental apartment on the premises. It may be "grandfathered" into the zoning, or in some areas of the northeast, it could be a legal "in-law apartment" where the original owner used it to have a relative close by. It could be used as a guest type arrangement; all sorts of possibilities. I have seen some lovely apartments over garages, attractively designed and finished mostly in rural settings. In a city though, they can be ugly ducklings, and a detriment when it comes time to sell.
If you are going to rent it, and expect to declare it as income property on your taxes, don't forget you will have to have liability insurance as income property also, it absolutely has to have "legal" zoning. Very easy to find that out.
do you want to be a landlord and deal with those headaches?
yes you "can" afford it with rental income, can you afford it without, its not going to be rented 100% of the time.
why do you want to do this? if the rental income is almost completely offset by the higher price, it seems that you're buying a headache, not a benefit.
in my area when I was a first time homebuyer I considered doing this. however all the houses I looked at that were set up for it, had enough of a premium on the price that it hardly seemed worth it, nevermind that they were all "illegal"
I would find a garage apartment a wonderful element IF the property still had a garage. If you look up the county appraisal description and it indicates the property has the garage apt, it is "legal" (at least in my area)
You need to check with the city or county for how the property itself is zoned, and whether the zoning allows a rental apartment on the premises. It may be "grandfathered" into the zoning, or in some areas of the northeast, it could be a legal "in-law apartment" where the original owner used it to have a relative close by. It could be used as a guest type arrangement; all sorts of possibilities. I have seen some lovely apartments over garages, attractively designed and finished mostly in rural settings. In a city though, they can be ugly ducklings, and a detriment when it comes time to sell.
If you are going to rent it, and expect to declare it as income property on your taxes, don't forget you will have to have liability insurance as income property also, it absolutely has to have "legal" zoning. Very easy to find that out.
Thanks for the info! I will have to call around. I would be interested in renting it, if not right away at least sometime in the future. If I can't rent it legally then I wouldn't rent it.
I am worried about resell though. I'd have to find someone willing to become a landlord or someone who needed a guest house. Definitely narrows the buyer pool.
Quote:
Originally Posted by Chrisk327
do you want to be a landlord and deal with those headaches?
yes you "can" afford it with rental income, can you afford it without, its not going to be rented 100% of the time.
why do you want to do this? if the rental income is almost completely offset by the higher price, it seems that you're buying a headache, not a benefit.
in my area when I was a first time homebuyer I considered doing this. however all the houses I looked at that were set up for it, had enough of a premium on the price that it hardly seemed worth it, nevermind that they were all "illegal"
THe houses are in my price range even without the rental income so as I said in my first post, affording either house is not an issue. Renting them would be for extra income but if they sat empty it wouldn't be a problem financially. I'm not sure I want to deal with the headaches though. My father has had rental property for years until recently but he's always been a long distance landlord. He thinks since they'd be living next door, I wouldn't have the worst of the problems he's had with tenants in another state. I'm a little concerned I'd be facing a new set though and don't really know what they'd be.
There is a premium on the price for the garage apt, roughly 15-20k per house I think. I imagine I could knock a little off the price during negoation as one house has been on the market 8 months and the other 6, just not sure how much they'll come down.
Quote:
Originally Posted by meh_whatever
I wish we could find one of those around here. I'd move my 20yo son into it.
My sister has expressed interest in living in ours should we get one!
Quote:
Originally Posted by Squirl
I would find a garage apartment a wonderful element IF the property still had a garage. If you look up the county appraisal description and it indicates the property has the garage apt, it is "legal" (at least in my area)
I tried looking this info up online but it's not available, will have to make some calls to find out. One of the apartments is over a two car garage, the other one doesn't have a garage. The one without a garage does concern me with regards to parking. There's a driveway but you'd have to stack two cars which means either I'd be parking on the street or the renter would. I've got no interest in shuffling cars right before work for either of us!
Thanks everyone for the comments, appreciate all advice on this one as I really don't know quite what I'd be getting myself into.
I have found a couple of homes that appear to fit what I'm looking for, on paper at least. However, both homes also have a 2/1 garage apartment. One of them is actually over a detatched garage while the other is detatched but either used to be the garage or is just being called a garage apt instead of a guest house since it's rented. Without the garage apartment, neither house would be worth the asking price but are still within my budget without any help from rent.
Obviously there is the benefit of rent but I figure the insurance cost is going to go up as well, right? Plus the issue of any repairs the apt should need, either because something broke while people live there or because it needs fixed prior to someone moving in. And the headache of renting the place out to begin with, or perhaps worse, evicting folks. Is this more trouble than it's worth?
I haven't been inside these places, just debating if it's even worth considering as a first time homebuyer.
Myth: Real Estate is a cash flow business.
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