I have 2 rental properties both in Canada. They have appreciated (assessment $1.35 with $300K mortgage). But not producing significant income because they're under rent control.
I can't sell property #1 because my sister lives in the downstairs unit, she's disabled and its accessible. And I am reluctant to sell #2 because its always been part of my retirement plan. It would be great for those late years 70-75 when I want something accessible, close to shops, in a town with stable economy & infrastructure, etc. And easy to add a caregiver apartment (its in Victoria BC).
But right now at age 57 I really want to buy something in SoCal. I live in Santa Monica and pay $2400 in rent: also its NOT rent control so can expect an increase at any time.
Also, my job is suddenly precarious. The owner of my small company may retire.
Right now I have about 80K in cash / down payment and was thinking of something in $450=500 range with two bedrooms, one bath, and a garage. I was thinking that I can furnish the house and rent one room and then gradually renovate the garage or add a shed on a line of credit with a toilet, shower stall and a kitchen sink/fridge.
And then moving into the reno garage -- and renting both bedrooms -- would be my early retirement plan (age 62-70/75 or whenever I get frail). I would have low overhead, a secure home base to store stuff and come home to. And the I could do what I want which is to live in some of my favorite cities abroad for 6 months to a year each time.
So is this a terrible plan? It would allow me to keep my sister in place, my final home (Victoria) in place, and reduce my costs. Also, the next few months may be the only time I can get a mortgage (if my company goes under).
Re living in garage/shed. Yes, I've lived in micro spaces (although it was actually 300sq/ft). The lack of kitchen wasn't an issue (lack of storage for bike, board etc more problematic). I'm thinking serious downsizing and stuffing things in rafters.
Other stuff (in case its relevant): about $450 in IRA/RRSP (the canadian equivalent). and $1000/month (gross) pension from a job that I had a long time ago (was required to start take at 55). My IRA/RRSP average 5% y/0/y for last ten years, I know thats low but not sure I can take more risks if i'm expecting to start drawing down in 5 years. I was not just a timid investor but a TERRIFIED investor and that has meant I left out some real potential gains.