Some first-time buyers are finding ways to cover the costs of home ownership by purchasing a multi-unit home that can accommodate a mother-in-law apartment or another rental unit. The added money can then help them cover their mortgage.
“Renters like the privacy and homey feel of an accessory dwelling over renting a room in an apartment complex,” notes a recent article at RISMedia “Thanks to this demand, savvy buyers know they can rely on a steady stream of income from a rental unit. Many home owners use this money source as a way to save for retirement or pay down their mortgage.”
What’s more, at resale, buyers stand to net more for their multi-unit home. According to an article in the New York Times, 15 percent of buyers say they are willing to pay extra for a home with an accessory dwelling. These buyers say they want the extra space for a tenant, relative (multi-generational households are growing), or for a detached home office.
Taxes can also work to the advantage of multi-unit home owners. For example, owners may be able to deduct expenses from their taxes like repairs, maintenance, insurance, supplies, and travel.
Still, buyers to these properties likely will need to expect to pay more. Multi-unit homes tend to sell at a premium. Some fully permitted units fetch up to 60 percent more than single dwelling homes, according to some surveys. Also, buyers need to carefully consider whether they truly are ready to step into a landlord-type role and the responsibilities that can hold.
Source: “First-Time Homebuyers: How to Save Money with an In-Law Apartment, Duplex, or Guest House,” RISMedia (April 7, 2016)