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A question: Are you SURE this whacky HOA is going to allow you to rent out that smaller house?
My opinion: I'd be going with Option B (the one you have already eliminated). Reasons why include:
You're going to end up dealing with a bank anyway to build the bigger house - why not do it now rather than later (when we can reasonably assume interest rates will be higher).
You're going to be pissing away money building that smaller house. Why not put that money towards something that you want for the long term?
IF you are allowed to rent out the smaller house, you've just taken on a 2nd job as a landlord. And won't it be fun to have the tenants know exactly where you live so they can come right to your door to complain about something.
Eventual resale - I think it's a reasonable assumption that buyers would prefer to have one big, nice house rather than a big house with a small house on the same property (except in Mexico and certain areas of the US where that small house would be called a casita.)
It's a rural lot, over 10 acres, lot is paid for. I am currently renting a home and don't want to be wasting money on the rent.
I am leaning towards option A. The only reservation I have is that the HOA requires the larger home in 5 years. This will require me to take out a loan to spend money and build BUT I will have equity in the property and could possibly rent the smaller home which will offset the costs of building the larger home.
What is the area minimal zoning for the two houses?
What about building a two car garage with an apartment above it. That way you can use one bay in the garage as a work shop, you will have a place for your car/truck in the Winter, and you have a place to live.
Will the HOA go for that without invoking the five year rule?
Agreed. That rule makes no sense. Why would it matter to an HOA how large your house is? They seem to be one of the bad ones; a group that doesn't exist to keep the neighborhood safe and livable for the residents, but to interfere with the homeowners' lives.
It's just the way it is. The reason the HOA gives is that by dictating the minimum square footage, it protects the property value of others in the area. The CC&R's are there to create a subdivision that has comparable properties.
Look, I don't like it, I don't like HOA's saying what you can and can't build but that's the way it is out here. HOA's are everywhere and like I said, this one is lenient. Other HOA's in the area would mandate a 2,500+ square foot home and they wouldn't allow my design. Everything is cookie cutter to them.
So this one is lenient, not perfect, but definitely lenient compared to the other ones.
Are you zoned for two houses on your lot? Are you on city water and sewer or are you going to have to put in two septic systems?
Yes, 2 houses are allowed. One has to be smaller than 800 square feet but the bigger one can be 1,700 square feet or 4,000 square feet. They don't care as long as the 1 of the 2 homes is under 800 square feet. They consider it a guest house.
NO city water/sewer. It will have one well serving 2 homes and 1 septic system serving 2 homes. The well and septic is large enough to serve 2 homes. So only 1 well and 1 septic.
Quote:
Originally Posted by kab0906
I think a lot of questions will need to be answered. First, how will the land be divided if you go with the two house option and what are the costs associated with that? Second, would renting out the smaller house be allowed and would there be a decent market for that? And if you want to be your own gc what hoops would you have to go through to be acceptable to the bank - seems like that question will still be there no matter what option you choose.
The land will NOT be divided. It will be seen as 2 homes (main + guest house) on a single lot.
If the 2nd house is rented years later, it would be rented to a close friend or acquaintance, so they will be vetted and known to me. I would never rent to a complete stranger. I have plenty of friends that rent in the area and they would be the ones who I would offer the rental to.
Banks don't like owner/builder GC, that's way I was leaning towards Option A since B would mandate a licensed GC and that makes the build much more costlier.
Location: When you take flak it means you are on target
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Ten acres. I'd build the guest house, live in it, save every dime, then in five years start building the big house out of pocket. Then concrete a flat area, call it a helicopter pad. Put in a pond and metal shop, barn, warehouse. More concrete and you have a tennis and basketball court. Some split rail white fence, some electric gates and a gravel driveway. Now you have an "estate."
I don't want to sell the lot and I don't want to buy an existing house somewhere else. If I did, then I would have posted that as one of the options but I didn't.
As far as two homes on the lot go. I can rent the smaller home when the main house is built. That's income.
Every HOA has CC&R's, some are more strict than others, this one is lenient compared to others. Most HOA's demand 2,500 or larger homes, some even want 3,000+ sqft homes. Most dictate what it can look like. This one is lenient and allows different designs.
I love the lot, it's 10+ acres of trees, open space, wildlife, no neighbors, quietness and views. Why would I sell the lot and move next door to someone in suburbia?
Are you so sure you can rent an 800 sq. ft. home in your rural location? I'd really check out the market, especially considering it sounds like you'd be out in the sticks with a lot fewer people who might be interested.
Are you so sure you can rent an 800 sq. ft. home in your rural location? I'd really check out the market, especially considering it sounds like you'd be out in the sticks with a lot fewer people who might be interested.
Like I mentioned, it would be rented to a close friend or acquaintance, so they will be vetted and known to me. I would never rent to a complete stranger. I have plenty of friends that rent in the area and they would be the ones who I would offer the rental to.
It's a little but further from town, maybe 30 minutes, but plenty of people like rural quietness and security vs living in the city with crime and noise.
Ten acres. I'd build the guest house, live in it, save every dime, then in five years start building the big house out of pocket. Then concrete a flat area, call it a helicopter pad. Put in a pond and metal shop, barn, warehouse. More concrete and you have a tennis and basketball court. Some split rail white fence, some electric gates and a gravel driveway. Now you have an "estate."
Meanwhile, increase your income.
I sense some sarcasm in your response.
Would you build the guest house and then save and build the main house in 5 years?
Like I mentioned, it would be rented to a close friend or acquaintance, so they will be vetted and known to me. I would never rent to a complete stranger. I have plenty of friends that rent in the area and they would be the ones who I would offer the rental to.
It's a little but further from town, maybe 30 minutes, but plenty of people like rural quietness and security vs living in the city with crime and noise.
That's bad too. By renting to a friend or acquaintance, the whole relationship can be ruined if any landlord/tenant issues come up. I never do business with friends/lovers. It's a variation of the sage advice: "Don't defecate where you eat."
That's bad too. By renting to a friend or acquaintance, the whole relationship can be ruined if any landlord/tenant issues come up. I never do business with friends/lovers. It's a variation of the sage advice: "Don't defecate where you eat."
I view things differently. I don't view friends as "defecation" and I don't have a lifestyle defined by "lovers". We come from different world views, so I will leave it at that.
I've rented from friends and never had an issue and that's not to say issues can't come up but civilized people can resolve them without resorting to uncivilized reactions. I choose my friends carefully. I went into business with my friend and things worked out great, years later we are still friends.
We are getting sidetracked anyways.
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