Build a shed and rent out the house

[funnybunny]

I'm not challenging anyone to do this. Just wondering if anyone has thought about it. I've been kicking around the idea for a couple of months. Even went to Lowe's to price out the materials. I was thinking it would be pretty cool to build a 12x16 shed in the back yard and rent out the rooms in the house. The rent will cover the cost of the mortgage and utilities. And in about five years I will have enough savings to pay off the house. What do you guys think? Too extreme? Keep in mind I will be using high end materials and the final product will look nicer then any room in the existing house.

[Honest Abe]

If your local municipality caught wind of this they would not be pleased... You would have to get that structure approved as a dwelling, which no doubt would drive up the cost. Not saying its not possible, just that its not as simple as building a large dog house in your yard and living inside it.

[arebelspy]

Search these forums for tiny house, tumbleweed, etc.

https://forum.mrmoneymustache.com/ask-a-mustachian/tumbleweed-house-income-property/
https://forum.mrmoneymustache.com/do-it-yourself-forum!/considering-building-a-tiny-house-(on-a-trailer)/
https://forum.mrmoneymustache.com/welcome-to-the-forum/super-tiny-house-(1sm9sf)-thought-provoking/
https://forum.mrmoneymustache.com/real-estate-and-landlording/rent-or-buy-advice-needed/
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/reduce-housing-costs-to-zero/

Those are some potentially related threads.  Though maybe not exactly what you're thinking, they'll probably give you some things to think about.  I know there are more (including some discussing exactly what you've proposed), so dig around some.

Welcome to the forums!  :)

[funnybunny]

Thanks for the links. I did contact the city and they sent me a brochure on the rules of building a shed. As long as it is under 200 sq ft and under 15 feet high it does not require a permit. It also has to be a certain distance from the road, house, and neighbor's boundary line. As long as all of that is satisfied, they can't do jack to me. As for living in it. They said I can't rent it out to anyone but I can have a family member or myself stay in there. This will not be considered a permanent residence since I will only be sleeping in there. The rest of the time I will be hanging out in the main house. 

[jpo]

While house hunting I have seen a lot of restrictive covenants banning this sort of thing. You might want to check those if your land is subject to any.

[Kira]

How is this superior to living in the basement? As a renter, I would be seriously creeped out if my landlord lived in a shed in the backyard.

[GuitarStv]

As long as your shed is kosher with fire codes and structural regs for a dwelling this sounds cool to me.

[tomq04]

How is this superior to living in the basement? As a renter, I would be seriously creeped out if my landlord lived in a shed in the backyard.

I'll 2nd that.

[MissStache]

How is this superior to living in the basement? As a renter, I would be seriously creeped out if my landlord lived in a shed in the backyard.

I'll 2nd that.

Add me as a third. 

[soccerluvof4]

How is this superior to living in the basement? As a renter, I would be seriously creeped out if my landlord lived in a shed in the backyard.

I'll 2nd that.

Add me as a third.


Add me as a 4rth. Not to mention what about sanitary needs? if you were able to put a 12x6 place in with plumbing that might get expensive and i doubt any municipality will let you get away with that.

[horsepoor]

My dad has been doing this for years.  Bought a house with a detached garage and built a simple studio apartment in the garage.  He did put up a six foot fence between garage and the house so tenants have their privacy.  Its also a corner lot so he can access the garage from the side street rather than through the front of the property.

[foobar]

Just stay in a room in the house.  How would you like to be living in the house and at 3 am the door opens because the crazy guy in the backyard needs a restroom.

I'm not challenging anyone to do this. Just wondering if anyone has thought about it. I've been kicking around the idea for a couple of months. Even went to Lowe's to price out the materials. I was thinking it would be pretty cool to build a 12x16 shed in the back yard and rent out the rooms in the house. The rent will cover the cost of the mortgage and utilities. And in about five years I will have enough savings to pay off the house. What do you guys think? Too extreme? Keep in mind I will be using high end materials and the final product will look nicer then any room in the existing house.

[abhe8]

or how about buy a small used travel trailer and live in that? i think the shed or a detached garage/finished as an apartment or a basement or attic apartment and renting the house seems like an awesome idea. i'd love to rent out our basement but i can't get my dh on board. (yet :))

[RadicalPersonalFinance]

I've thought about this scenario for my family, but, so far, haven't done it.

My big question...what does your significant other/family think about it?

Another question: If the goal is to do it in order to pay off the house faster, why not re-consider needing the house at all?  Meaning that if you're comfortable living in a small shed for 5 years (which is a pretty long time), why not just make that a permanent lifestyle plan?  What would change in 5 years?  There are lots of people who have gone down that road (just living in a tiny house from the start)

If you're the type of person/family that would be happy living in a shed for 5 years, why not just dump the modern idea of a house, skip paying off the mortgage (sell it or just rent the whole property) and adopt an "alternative" lifestyle (as in living in an RV/travel trailer, boat, tiny house, small studio apartments, etc.) without plans to move back into the house.

[happy]

I know of someone who has done a similar thing, renovated a small shed/flat and rented out the house. It didn't work out, until a dividing fence was erected and the tenants were clear that they were renting the house, but not the land lord.