Had any horror stories renting in Law Suites or ADUs?

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Had any horror stories renting in Law Suites or ADUs?

Jon S.Pro Member
Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes

Have there been any horror stories about renting out in-law-suites that don't have a separate address? I'm contemplating renting an in-law-suite that doesn't have a separate address. While I know many people do this with their rental properties, I am wondering if anyone has had any horror stories as a result of doing so?  

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Christopher Hanley
San Diego, CA · Member since 2015 · 3 posts · 3 votes
10y

@Jon S, most of the issues I've seen boils down to HOA / code enforcement / underestimation of utility usage. Most properties covered by HOAs with in law suites can't be rented out without running afoul HOA regulations. Those can be really, really terrible if you violate them.

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  • Christopher Hanley
    San Diego, CA · Member since 2015 · 3 posts · 3 votes
    10y

    @Jon S, most of the issues I've seen boils down to HOA / code enforcement / underestimation of utility usage. Most properties covered by HOAs with in law suites can't be rented out without running afoul HOA regulations. Those can be really, really terrible if you violate them.

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y

    The good news is that it's not located in an HOA.

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y

    Just as clarification, I, as the owner, am not occupying the main house, the main house is being rented to good tenants, and I would like to also rent out the in-law suite, which is a really nice little 2/1. I am trying to learn what problems others have had, what to avoid, etc. 

    I have a locked privacy fence placed between the main house and the in-law suite, and separate yard entrances for them, so I am trying to provide maximum privacy. 

    Without a separate address for the in-law suite, the back tenant won't be able to get mail. 

    The utilities will have to remain in my name. Rent will have to include water, electric, sewer and garbage. 

    I'm worried about the lease language, identifying in the lease, access to the main house only, and access to the in-law suite only. How would you word that? 

    I'm worried about, in the event of an eviction, how would the sheriff be told to only evict the tenant in the in-law suite, not the tenant in the main house, or visa-versa, when there is only one address? 

    Thank you BP community. 

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y
    Originally posted by @Christopher Hanley:

    @Jon S, most of the issues I've seen boils down to HOA / code enforcement / underestimation of utility usage. Most properties covered by HOAs with in law suites can't be rented out without running afoul HOA regulations. Those can be really, really terrible if you violate them.

    Thanks Christopher. Fortunately, there is no HOA involved.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Jon S. the ADU's are the rage in High end new construction in our market.. our city is pro cramming density ... and buyers like the added income many times it might pay 50% of your monthly nut

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  • Scott Weaner
    Rental Property Investor · Yardley, PA · Member since 2008 · 1k+ posts · 561 votes
    10y

    Can't you just make it unit "B?" Put up a mailbox?

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y
    Originally posted by @Scott Weaner:

    Can't you just make it unit "B?" Put up a mailbox?

    I could call it unit B if the property were zoned as a duplex or zoned to have two units for rent, but it is zoned as SFR. It doesn't look like I can change the zoning.

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y
    Originally posted by @Jay Hinrichs:

    @Jon S. the ADU's are the rage in High end new construction in our market.. our city is pro cramming density ... and buyers like the added income many times it might pay 50% of your monthly nut

    If this doesn't work out as a rental, I might use the ADU to increase the property's market value and sell it. However, if it does work out as a rental, my calculations indicate that I will earn significantly more by renting and holding the property for a few years before selling.

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  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    10y

    It would be better if the tenants in the main unit found tenants for the in-law. We were surprised how many tenants are looking for that type of setup for extended families etc. So we have done this on some smaller duplexes we own.

    Then they could sort out the utilities themselves (I would never have them in my name) as well as the mail box issue. We had a tenant blow us into the USPS because a couple of tenants were using a common mailbox at a rural multi. 

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  • Kyle Kingma
    Tyler, TX · Member since 2015 · 85 posts · 24 votes
    10y
    Originally posted by @Jon S.:
    Originally posted by @Scott Weaner:

    Can't you just make it unit "B?" Put up a mailbox?

    I could call it unit B if the property were zoned as a duplex or zoned to have two units for rent, but it is zoned as SFR. It doesn't look like I can change the zoning.

     Well there's your answer. If you can't change the zoning to make it legal, don't do it. It is a MIL, not a second dwelling unit. Does it have a stove in it?

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  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    10y
    Originally posted by @Kyle Kingma:
    Originally posted by @Jon S.:
    Originally posted by @Scott Weaner:

    Can't you just make it unit "B?" Put up a mailbox?

    I could call it unit B if the property were zoned as a duplex or zoned to have two units for rent, but it is zoned as SFR. It doesn't look like I can change the zoning.

     Well there's your answer. If you can't change the zoning to make it legal, don't do it. It is a MIL, not a second dwelling unit. Does it have a stove in it?

     Good point !!!!

    We had a home that was rendered SFH by the Bldg Dept., after it was a duplex for many years. It was a huge home with a full sized 1 bed unit in the rear. We were told we couldn't sell it with the premium a 2 unit pulls but we kept it at our price & found buyers who were taking care of a disabled wheel chair bound Vet. By simply opening a wall & installing a doorway the city allowed it as well as leaving the second kitchen etc in place.

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  • Jon S.Pro Member
    OP
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    10y
    Originally posted by @Pat L.:

    It would be better if the tenants in the main unit found tenants for the in-law. We were surprised how many tenants are looking for that type of setup for extended families etc. So we have done this on some smaller duplexes we own.

    Then they could sort out the utilities themselves (I would never have them in my name) as well as the mail box issue. We had a tenant blow us into the USPS because a couple of tenants were using a common mailbox at a rural multi. 

     I like this idea, of letting tenants in the main unit find tenants for the in law suite. Thanks for this idea. 

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  • Kyle Kingma
    Tyler, TX · Member since 2015 · 85 posts · 24 votes
    10y
    Originally posted by @Pat L.:
    Originally posted by @Kyle Kingma:
    Originally posted by @Jon S.:
    Originally posted by @Scott Weaner:

    Can't you just make it unit "B?" Put up a mailbox?

    I could call it unit B if the property were zoned as a duplex or zoned to have two units for rent, but it is zoned as SFR. It doesn't look like I can change the zoning.

     Well there's your answer. If you can't change the zoning to make it legal, don't do it. It is a MIL, not a second dwelling unit. Does it have a stove in it?

     Good point !!!!

    We had a home that was rendered SFH by the Bldg Dept., after it was a duplex for many years. It was a huge home with a full sized 1 bed unit in the rear. We were told we couldn't sell it with the premium a 2 unit pulls but we kept it at our price & found buyers who were taking care of a disabled wheel chair bound Vet. By simply opening a wall & installing a doorway the city allowed it as well as leaving the second kitchen etc in place.

     Exactly. The opening of the fire barrier meant that the second unit was gone.

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