Author Topic: Buy home and Rentout House, live in garage?  (Read 993 times)

LukeS

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Buy home and Rentout House, live in garage?
« on: January 24, 2016, 05:21:22 PM »
I am still living at home with my parents and have been going back and forth between heavier 401k investing and saving for a house.  I don't really need a whole house to myself currently, but long term I know I want one.  My real interest is in a big multi-car garage/shop because I like working on cars and machines and would be thrilled to do so out of the weather.  I am an apprentice trades worker and working towards being able to take a test for a Journeyman's license ( about two years away).  My goal is to either move out of state and chase higher paying projects for a couple years, or move straight into getting my own truck and working for myself in my current area ( this is kind of what I want to end up doing anyway but it would be nice to go rake in some big SAFE paychecks first ).

There are several homes in my neighborhood which have lots that extend from one street to the next, and some of these have workshops built in the backyards with their own driveway to the back road.  What I have been kicking around is buying one of these homes, doing a few repairs or upgrades on a short timetable, building a fence between the house and shop ( still leaving a decently sized backyard for the house) and then renting the home out ( which has its own garage up front) while I have the shop in the back to enjoy for myself.  I could potentially even finish out a small studio living place in a corner of the shop and live there, or continue living literally down the street at my parents place.

Supposing I could rent it in such a way that it almost cash-flowed , and i was in the negative less than a garage space like that would rent for I would be winning right? 

I figure I can manage and do basically all maintenance on the place myself for at least the next two years, and then if I do move for work I can put it under management while away.  I could save up enough to put 20% down on one of these places and then switch back to prioritizing 401k and then when one of these comes up on the market I am ready.

Does anyone have any feedback on this idea?  Why it is or isn't a good idea?


NinetyFour

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Re: Buy home and Rentout House, live in garage?
« Reply #1 on: January 24, 2016, 05:29:12 PM »
Check with your city/county to make sure such an arrangement is legal.

My town just went through a permitting process to make sure these things (we call them Accessory Dwelling Units) are safe, etc.  Your town may charge you extra fees, make you provide extra parking spaces, etc.
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SeanMC

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Re: Buy home and Rentout House, live in garage?
« Reply #2 on: January 24, 2016, 06:44:20 PM »
Check zoning and permitting. This could range from no big deal to totally illegal.

I would also wonder about the numbers for rentals and ROI where you live. It may be doable or the difference on ROI could be the equivalent of a garage rental. Or you might be thinking wishfully about your vacancy rate, how attractive the rental will be with the presence of a noisy/busy workshop abutting their yard, and so on. Are you considering all costs that come with managing and owning, even if you can do the maintenance yourself? Be sure you are choosing a nearby property because it is a good (or good enough) rental for investment, not because it is literally down the block from where you live.