Author Topic: Living in In-Law Suite and Renting Main House?  (Read 1064 times)

PrairieBeardstache

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Living in In-Law Suite and Renting Main House?
« on: April 09, 2018, 08:13:53 AM »
Hello folks,

I'm considering buying a house in which I can convert the garage to a livable space (legal where I live assuming a couple conditions). The obvious benefit being that I can reduce living costs even further than I already have by renting the house. I'm perfectly fine living in a small space as I'm fairly minimalist and I even prefer it as I enjoy renovations and smaller spaces allow me to use high quality materials economically.

I, however, have never been a landlord and have intentionally avoided it until now in pursuit of other means of income. I'm wondering if anyone here does this and can describe their experience? Positives? Negatives?

Thanks a bunch.

rothwem

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Re: Living in In-Law Suite and Renting Main House?
« Reply #1 on: April 09, 2018, 09:30:11 AM »
I owner-occupy one side of a duplex.  I've found that its awesome when you have great tenants, and miserable when you have bad tenants, so screen the hell out of them.  Make a real lease, and stick to it.  Be quick about addressing issues, both with the house and your tenants' behavior.  Run the numbers, and make sure you're going to be getting enough in rent to offset the mortgage on the house AND maintenance, and be sure that you're not going to be spending more than you would if you were to just live in a small house. 

PrairieBeardstache

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Re: Living in In-Law Suite and Renting Main House?
« Reply #2 on: April 09, 2018, 10:05:20 AM »
I owner-occupy one side of a duplex.  I've found that its awesome when you have great tenants, and miserable when you have bad tenants, so screen the hell out of them.  Make a real lease, and stick to it.  Be quick about addressing issues, both with the house and your tenants' behavior.  Run the numbers, and make sure you're going to be getting enough in rent to offset the mortgage on the house AND maintenance, and be sure that you're not going to be spending more than you would if you were to just live in a small house.

What do you tend to look for when screening?
What kind of things do you consider bad behaviour for tenants?
Gotcha's for maintenance?

Cwadda

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Re: Living in In-Law Suite and Renting Main House?
« Reply #3 on: April 09, 2018, 10:49:34 AM »
I also owner-occupy one unit in a 4-family. Financial-wise, it's a no brainer. Living for reduced/free is ridiculously good.

The biggest thing you need to consider are the numbers. If it's not or you, even landlording/tenant screening can be outsourced to a management company.

Rental income covering the mortgage is not necessarily a "good deal" (despite what all the agents will tell you).

Does it cover the mortgage taxes, and insurance?
What about monthly maintenance and a repair budget (Capital Expenditures)?
Does it cover utilities, water & sewer? Trash, snow removal, grounds keeping?
How about vacancies? Does rent cover that too?

If it covers these, gives you income, and provides a cash return similar or above what the stock market would give you, then go for it.

badassprof

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Re: Living in In-Law Suite and Renting Main House?
« Reply #4 on: April 12, 2018, 09:23:29 PM »
We have an in law unit (2 br) and it has been great. We are in a high demand area (bay area and 2.5 miles from a major university). Often we become friendly with our tenants, watch each otherís dogs, watch sports together, etc. been great, and the financial benefit is awesome too.

Cwadda

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Re: Living in In-Law Suite and Renting Main House?
« Reply #5 on: April 13, 2018, 07:23:25 PM »
We have an in law unit (2 br) and it has been great. We are in a high demand area (bay area and 2.5 miles from a major university). Often we become friendly with our tenants, watch each otherís dogs, watch sports together, etc. been great, and the financial benefit is awesome too.

Question for you: Do town/city zoning laws say that one cannot use an in-law apartment for source of income?

badassprof

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Re: Living in In-Law Suite and Renting Main House?
« Reply #6 on: April 14, 2018, 10:26:03 PM »
No: quite the opposite. We have a dearth of rentals in our area and things are loosening more than they were before.