So I like the idea of an income property. I am definitely not as bold as some personal finance bloggers who own two or three different residences, rent them out, and turn a nice little profit. That takes some serious cajones. I am far to risk averse and hate debt way too much to take something like that on. Heck. if I’m not even convinced purchasing a home for myself is a good idea, why would I buy one for someone else?
That said, the idea of a a mother-in-law rental sure does tickle my fancy, and in case you didn’t know, I like my fancy being tickled….wait, that doesn’t sound right. Girl Ninja and I currently live in a tiny little 700sqft unit above our landlord’s house. He has this giant mansion with 30 foot ceilings throughout, but on the back-left corner he put in a small one bedroom apartment. You know why he did this? OUR RENT COVERS ALL OF HIS HOUSING EXPENSES!!!!
Our landlord paid cash for his house (like a boss) and built our unit for the sole purpose of cash flowing his household expenses. Our $975/mo covers all of the utilities, property tax, and insurance. How sick is that? Dude doesn’t pay a dime to live in his 3,000+ square foot home because he lets us rent 700 square feet above his workout room. If that doesn’t turn you on I don’t know what will.
So when the time comes for us to pull the trigger and buy our first place, I am definitely going to consider the ability to add a mother-in-law (MIL) to the residence. In the greater Seattle area, that will most likely mean finding a house with an unfinished basement.
There are some serious pros and cons to this option. Pro, we could reduce our mortgage payment by half for renting out only a quarter of our house. Con, we share OUR home with someone else. Pro, adding a MIL to a home typically helps resale value and ease of sale since that feature will appeal to many buyers. Con, we share OUR home with someone else. Pro, the MIL would be a sweet place for guests to stay in the event we decide we don’t want to rent it out. Con, a MIL requires us to share OUR home with someone else!
I’d be 100% committed to going the MIL route if it weren’t for that one con. Sure renting it out might be tougher than we hope. Sure we’d become landlords and be much more accountable to fixing any issues with the house ASAP. Those things don’t concern me too much if we have an affordable mortgage. The only concern I have is that we could potentially rent to a creepy person that likes cutting people’s skin off. Hey, ya never know, it could happen.
I like the idea, but don’t know if I’d like the reality. What are the pros and cons as you see ’em? Would you add a MIL to your house (or future house if you are a renter like me)?