Author Topic: Building a mother in law apt a good idea?  (Read 3515 times)

RavensBrew

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Building a mother in law apt a good idea?
« on: July 23, 2014, 02:24:24 PM »
My partner and I have a 2k mortgage on a 3 bedroom house that is much too big for us. we don't have kids and don't plan on having any. We love our house ad think it's a great investment so we don't want to sell at this point. I was wondering if building a garage with a mother in law's apt above it would make financial sense. Out lot is plenty big (5k sq ft) and we would basically be modelling our new building after one that was built next to the house directly across the street. I roughly expect (very roughly, internet research only) the entire build out to max out around 100k. The idea is that we live in the small 1 bedroom apartment and then rent out the house. We could rent the house for about what the mortgage costs. We could finance 50% of the buildout with cash and would require some sort of loan for the other 50k. In the long run it seems this would save us significant sums of money. It would also raise the value of our property some.

Does anyone have any experience doing this? Did it turn out to be a good idea?

Cassie

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Re: Building a mother in law apt a good idea?
« Reply #1 on: July 23, 2014, 02:31:51 PM »
Years ago we did something similar although we stayed in the house since their were 5 of us. It only took us 2 years to make up what we lost building & then it was profit for the next 14 years.  It also helped us sell the house when we wanted to.  I think it is a great idea.   

Greg

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Re: Building a mother in law apt a good idea?
« Reply #2 on: July 23, 2014, 02:40:25 PM »
I have a small apt above my garage that I rent out, it's nice but the closeness can be weird if you get the wrong tenant, this would apply in your case as well.  Another option to consider is remodeling your home into a duplex.  Of course local ordinances, building code and zoning will affect what you can do legally.

RavensBrew

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Re: Building a mother in law apt a good idea?
« Reply #3 on: July 23, 2014, 02:43:13 PM »
Nice! Thank you for the first hand account! When we started thinking about this we thought it seemed like a good idea. The numbers run great. Plus, I like the idea of having the apartment available if we decide to move out of the city. even if we didn't live in the city anymore we would be spending a month or two a year there for work related projects.

I guess the next step would be to get some concrete numbers and to figure out if we could go from a 2000+ square foot house to a 400 to 500 square foot house!

RavensBrew

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Re: Building a mother in law apt a good idea?
« Reply #4 on: July 23, 2014, 02:44:02 PM »
Greg, that is a good point and something to consider. We would basically be on top of each other and would be sharing a back yard.

lakemom

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Re: Building a mother in law apt a good idea?
« Reply #5 on: July 23, 2014, 04:43:00 PM »
Greg, that is a good point and something to consider. We would basically be on top of each other and would be sharing a back yard.

Is the yard in a configuration you could divide it up with a privacy fence?

SwordGuy

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Re: Building a mother in law apt a good idea?
« Reply #6 on: July 23, 2014, 05:01:05 PM »
I've bought 4 bedroom houses for $120,000 to $135,000, so the idea of paying $100,000 for a small apartment seems awfully high.

Frugal Firefighter

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Re: Building a mother in law apt a good idea?
« Reply #7 on: July 24, 2014, 11:03:16 AM »
While mine isn't exactly the same, I plan to build a 40x20 garage in my backyard. 25x20 will be the actual garage part, and 15x20 plus a small bathroom are planned to be used as a shop with the potential to make it into a mother-in-law studio. The bathroom is half in the garage, half in the studio. The estimate I got from one company was $25,000 for the framing, roofing, siding. Hopefully that gives you some idea. Those are northwest Oklahoma prices though, I'm not sure about your area. I felt like the estimate was pretty high, and I could knock a lot of that out myself.

SwordGuy

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Re: Building a mother in law apt a good idea?
« Reply #8 on: November 01, 2014, 04:12:05 PM »
I've bought 4 bedroom houses for $120,000 to $135,000, so the idea of paying $100,000 for a small apartment seems awfully high.

I could buy two foreclosures in my area with 3 bedroom, 2 bath houses each for that kind of money and that includes fixing them up.

Have you read "What Every Real Estate Investor Needs To Know About Cash Flow" by Gallinelli?

If not, give it a solid read and then do the numbers.  Do your market research in your area for comparable rents.  Then you'll know.