Author Topic: Tumbleweed house - income property?  (Read 5905 times)

Tami1982

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Tumbleweed house - income property?
« on: June 05, 2013, 02:34:15 PM »
Hey guys,

I'm looking with an eye to the future.  Since I will have no debt other than my mortgage in 2014, I was thinking of doing a project like this:
http://www.tumbleweedhouses.com/products/cypress/#ad-image-0

I thought that if I started to accumulate things slowly now, reclaimed materials and such, I could do it very inexpensively.  Place it on the back part of my property and rent it out.  I am just starting to do math and research on this, but I think the novelty of the tiny house would be appealing to people.  I could maybe do an all inclusive rent of $350 or so?  At this point, I will be doubling my mortgage payment already, and with the income from the property, possibly tripling it.   

This will give me a hobby/project, plus the opportunity to learn new, marketable skills and provide me with income, or guest house/ travel option should I want it.  (As discussed in a previous thread - I believe my parents are hanging on by a thread and believe they may end up having to live with me at some point in the near future.  I'm covering my back that way as well.)

So the idea is, pick up free stuff as much as possible over the next 2-3 years.  Continue to pay the only debt of the mortgage back at double rate.  In 2017 I can have an appraisal to have PMI removed (I qualify now, but have to pay for five years) and hope to pay off the loan as quickly as I can.  I expect to be able to pay off the house within 7 years.  Maybe sooner if my income goes up in the next year or so. 

Any thoughts about turning my property into an income property?

Sweet Betsy

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Re: Tumbleweed house - income property?
« Reply #1 on: June 05, 2013, 06:01:30 PM »
We're thinking of doing the same thing for fun.  Make sure that you won't run into any issues renting it with your town/city ordinances but other than that, why not.  Even if you can't rent it you'll have a super cute guest house. 

stinkindog

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Re: Tumbleweed house - income property?
« Reply #2 on: June 05, 2013, 06:21:32 PM »
I have been thinking of building one  and living in it while renting out my house. I think I'd get more in rent for the 900 sqft house than a tiny house.

Zaga

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Re: Tumbleweed house - income property?
« Reply #3 on: June 05, 2013, 06:29:19 PM »
Very cute!  My concern would be finding a renter who would be willing to climb up to the loft bed.  You may be able to find that, but can your parents or other guests really manage that?

Tami1982

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Re: Tumbleweed house - income property?
« Reply #4 on: June 05, 2013, 06:49:02 PM »
We're thinking of doing the same thing for fun.  Make sure that you won't run into any issues renting it with your town/city ordinances but other than that, why not.  Even if you can't rent it you'll have a super cute guest house. 
  I don't know much about legalese of renting, so I will need to look into that. 

I have been thinking of building one  and living in it while renting out my house. I think I'd get more in rent for the 900 sqft house than a tiny house.

LOL! That's likely true.  My house is only 500 sq ft, but I want to keep all of it at this point!

Very cute!  My concern would be finding a renter who would be willing to climb up to the loft bed.  You may be able to find that, but can your parents or other guests really manage that?
Good point!  There is a college nearby so I was hoping for some sort of dedicated college student type - I figure they could manage it:)  In regards to parents, we can get around that because the plan has a murphy bed option for downstairs and, to be honest, I'd probably give them the house while I took the tiny home because I'd be able to cruise in and out at will with little regards to privacy.

Done by Forty

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Re: Tumbleweed house - income property?
« Reply #5 on: June 06, 2013, 09:14:45 AM »
What a cool idea!  I'd run the numbers but my gut says that getting approx $5k in gross rent (say, $2500 net) annually on, say, a $10-$20k investment, would be better than you'd see in a lot of other investments.  Yes, you are needing to work for this investment...but it sounds like work you want to do and learn about anyway.  Might as well make some money in the process.

I echo what others said about ordinances.  We called city hall to inquire about this same idea about a year ago and there are too many restrictions for it to work on our property (specifically, a new structure has to be so many feet away from any other structure and the property line for it to work in the space that we want). 

Your other option would be to build on a flatbed trailer, which circumvents the local laws.  Good luck and please circle back and let us know how it goes, if you move forward with the idea!

Ipodius

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Re: Tumbleweed house - income property?
« Reply #6 on: June 06, 2013, 09:20:42 AM »
I think this falls into the category of not being a great investment purely financially, but being an awesome investment once you consider the financial + personal growth + enjoyment returns.

One thing I'd suggest doing is getting some non-mustachian input from the type of person who would be a potential renter. While many Mustachians will think "awesome, cool idea" many 'normal' people may not be so keen on the idea. Targeting students will probably work well, but just be aware that student rentals often have other issues (high turnover, bad job looking after the house, etc) compared with normal rentals.



arebelspy

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Re: Tumbleweed house - income property?
« Reply #7 on: June 06, 2013, 09:24:28 AM »
I echo what others said about ordinances.  We called city hall to inquire about this same idea about a year ago and there are too many restrictions for it to work on our property (specifically, a new structure has to be so many feet away from any other structure and the property line for it to work in the space that we want). 

+1

Three potential legal issues even besides code stuff listed above:
Renting out a room often doesn't fall under local landlording ordinances.  Renting a separate domicile likely does.
Often properties are only zoned for one dwelling, not two.
Often homes have to be a certain size.

The tumbleweed on wheels idea may get around that, but it'd be like renting out an RV.  What's the legality of that?

Actually come to think of it, that may be a cheaper, quicker, easier way to accomplish some of the same goals (not the DIY ones, but the income ones).

Again though, likely your biggest hurdle is the legal part.
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Tami1982

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Re: Tumbleweed house - income property?
« Reply #8 on: June 06, 2013, 10:36:46 AM »
Thanks for all the input guys!  My understanding is that because it will be on a trailer, and therefore movable - basically like a 5th wheel - that it's not a permanent structure and should get around a lot of the legal issues.    I'm googling to find out more about landlording information, but most of it seems to be angled toward tenant rights and not so much from the landlording perspective. 

I appreciate the tumbleweed house vs a travel trailer/rv because of it's style, aesthetic, and build quality.  I think that this is something that will keep it's value better than an aged out fifth wheel.  Plus, I get to gain the building experience associated with putting this together and the comfort of a back up in case all truly goes to hell with my family. 

Also, I think I am in a good area (South Puget Sound - outside of Seattle) for this kind of thing.  People here tend to appreciate and lean toward the ideals associated with something like this.  We're not quite Portland (hehe), but it works.   

My thinking was also that with such a small space, and the quality of the materials (no standard walls to be damaged, no carpet, ect) that damaging could be limited, but you never know, people can be creative! 

anastrophe

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Re: Tumbleweed house - income property?
« Reply #9 on: June 06, 2013, 12:22:10 PM »
My understanding is that because it will be on a trailer, and therefore movable - basically like a 5th wheel - that it's not a permanent structure and should get around a lot of the legal issues.

Unless your community prohibits trailers entirely, many do. Check your ordinances for language around RVs and "manufactured housing."

Tami1982

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Re: Tumbleweed house - income property?
« Reply #10 on: June 06, 2013, 01:20:37 PM »
By community do you mean HOA or something?  I don't have those - and many people in my area have RV's and there are lots of mobiles on plots around me.  So I can't imagine it being an issue.  I mean, if I own it and have a right to store it on my property.  Only difference is that a person may live in it:)  But it is worth looking in to just to be sure.  Thanks!

anastrophe

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Re: Tumbleweed house - income property?
« Reply #11 on: June 06, 2013, 01:29:18 PM »
By community do you mean HOA or something?  I don't have those - and many people in my area have RV's and there are lots of mobiles on plots around me.  So I can't imagine it being an issue.  I mean, if I own it and have a right to store it on my property.  Only difference is that a person may live in it:)  But it is worth looking in to just to be sure.  Thanks!

No, I mean municipal codes (as above). There are a lot of things you might possibly own that you might not be allowed to have on your property--many kinds of businesses, toxic waste, farm animals, a junkyard, just to think of a few. Some people think a trailer of any kind, including an RV or a portable house, is the kind of thing they don't like to see in people's yards and the town government prohibits them accordingly. I don't get it, but that's how some people think. But if a lot of people in your area have mobiles than it probably is legal in your town. I just know some people have run into difficulty with ordinances re: their Tumbleweeds before so it's worth checking into.

Tami1982

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Re: Tumbleweed house - income property?
« Reply #12 on: June 06, 2013, 02:06:29 PM »
Oh!  I see.  Good call.  I looked up county records for my zoning and what the rules are and it appears that as long as it is NOT the primary dwelling all recreational vehicles are allowed.  The health dept does need to come and certify that the sewage and water hook ups are appropriate, but that appears to be it.  I will review again, and call and speak to someone to make sure I'm interpreting the rules right but thank you very much anastrophe for the information.  I likely would not have thought to check on that thinking since I didn't need a building permit that the county could be ignored. 
« Last Edit: June 06, 2013, 02:11:49 PM by Tami1982 »