We looked at another house today, and by looked I only mean driving by. For me, it is a high priority to have a potential income-generating property as our first. I figure that at this stage in our life since we can't afford our dream home, and the idea of selling a home makes me nervous, that we should buy something that could both work for a living space and future rental property. Though one day we might rent the whole house, before then here are a few thoughts as to the different rental options that have been on our minds.
Rent a Room
Renting out a room is the easiest option. College students or professionals are tenants that might fit best. Sometimes they are interested in a room (especially if it is furnished) if they have a short-term assignment. Renting a room would be very similar to having a regular roommate since you share the common areas. Craigslist is the spot to publicly advertise for this, however networking at work or with some college friends might find you a tenant with whom you have more in common.
A garage apartment is a unit on the same property but separate from house. The name comes of course because these units are commonly on top of the garage. Since they are not connected with the house, you can maintain privacy while having the benefit of someone chipping in on the rent. Though you can find a tenant the same as with the suggestion above, a simple sign might be the most effective way to fill a vacancy, especially if you live on a major road.
Duplex is a building that is effectively two homes with one shared wall. Duplexes usually cost only 20 to 30 percent higher than a comparable single family home, but effectively gives you double the house. Ideally, you live in one half and rent the other, but sometimes only half of the duplex is for sale. Even owning half of the duplex could still be beneficial in the long run after or if you move out. Unfortunately you obviously won't get any benefit from a tenant before you move somewhere else.
Downsides, and the Questions to Consider
If you had read this far, maybe I haven't turned you off of the idea. It is not for everyone. Heck, it is not for most. But it is a legitimate way to gain extra income, support the mortgage, and to set up your financial future for the better. And if you have yet to purchase property, you have even more options. There are serious questions to think about before diving in to your life as a landlord.
- When was the last time you lived with a roommate? Are you ready to do it again?
- Are you willing to live with less privacy for a few years?
- Do you recognize your tenant's need for privacy?
- How do you feel about being both landlord and roommate? Can you be both firm and courteous?
- How does your family feel about the idea? Do they support it?
- Do you have a legal plan or a place for legal resourcesas a landlord?
- Why do you want to do it? Will you be financially secure if you cannot get a reliable tenant?
Good luck in all your endeavors!