Rather long post ahead. I've thought through so many options and really just want to get it all out there so I can get some advice!
My husband and I got a fantastic deal on our gorgeous home in 2017. It's a very well updated/remodeled 3/2 1960s home on a 1/2 acre of land 3 miles from Downtown Greenville, SC. I actually brokered the deal myself, as the home was FSBO, and we had been BURNED by a previous real estate agent. We bought it for 135,000 with 5% down and a conventional loan. Based on comps from homes in our neighborhood, I believe our home to be currently worth $230,000. Below are specs on the neighborhood, details on the home and what the previous owners did to upgrade, how we use it now, and all my ideas for what we should do next.
We live in a reforming area that is quickly becoming a HOT market. We are in an actual neighborhood where many of the houses are being bought, refurbished, and sold. Prices are around 175k-250k right now. Across a main road from our neighborhood is another small neighborhood full of mill houses that was just declared a Historic district, and prices are shooting up on homes that are much smaller than ours and much simpler. Many are in the mid 200s as well.
The majority of our neighborhood is single family homes built in the 60s and 70s. Lots of split-level homes avg size is from 2-4 BRs. There are two duplexes (close to us) and a lot that is a house with 5 trailers on it next to ours. It's well maintained, but we all of course wish it weren't there. They were grandfathered into zoning.
A few miles in almost any direction are new condos and upscale neighborhoods, some of the premier locations in Greenville with 500k+ Lofts and homes.
The previous owners did a ton of work on this house-- almost everything was updated and re-done. And he was a craftsman, so it was WELL done. They planned to be here longer but had to leave due to work, and actually lost $$ on the sale.
Our house was originally a 2/1, but the previous owners converted the attic (very nicely-- solid work) to make another bedroom, bathroom, and a small office space. They then added a deck with an exterior entrance that leads to the attic and built a separate driveway for that space.
Currently, we rent out the attic space on Airbnb and more than pay for our mortgage.
Other home features:
-Granite counter tops
-Hardwood floors throughout
-Crown molding throughout
-Front porch, patio, and deck
-8ft SOLID privacy fence enclosing a HUGE backyard
-As of 2009-- all new electric, plumbing to the street, roof, and HVAC.
-Custom shed that matches the exterior of the home
-Foam insulation throughout, excellent windows
What we love
We love the area our giant yard (so rare this close to the city), our quiet street, and all the character and custom work in our home.
Why we're struggling
I enjoy having the Airbnb and don't really want to close it yet. Second bedroom is currently an office for me and a place to house my husband's LEGO collection (big hobby of his). If we had just a bit more space for an office for me or shop for him, then the large 2nd br could become the kid's room for at least a few kids. We'd also like to move our laundry to recover the closet they are in, as this house doesn't have many general storage areas. We also don't really have much flex space, which would be really nice.
Idea #1: Sell
We could take the equity and run, and buy elsewhere or build.
Pros: Could, in theory, get whatever we want.
Cons: The rest of the market is rising too. We wouldn't really come out that far ahead. 4BR houses are rare, not a lot of large lots, and would be further from the city and interstate. Building is crazy expensive and builders aren't the best in the area. Potentially would lose the Airbnb, so that's an income hit.
Idea #2: Add on
This is what we really want to do. We love the house, the diversity of the neighborhood, the yard, the EPIC FENCE, and the location can't be beat. ((We can easily finance with HELOC))
But we have 2 addition ideas. And I'm afraid if we do both, we may overbuild the area. We would do idea 1 and then do idea 2 several years down the road.
1. Detached Garage with Second Airbnb Unit
There is a small tract of land on our side yard that really makes more sense to be in our lot. Neighbor wants to sell and we are moving in that direction. On this lot, we were planning to build a 2 car "garage" with an office, laundry room, and potentially 1/2 bath at the back. We would actually insulate and Heat and cool the garage so it could be a flex space, work space, office, what have you. Above the garage, we would build a small 2B/2Ba apartment. The Airbnb income for the 2B/2Ba apartment would more than cover the cost of the addition and then some. The apartment will have to have a smaller "kitchenette" as we can't do a full kitchen for zoning reasons, but as long as we don't use a different plug (like for the oven) we can basically do whatever we want.
Questions: Is having such a large secondary unit setting us up for re-sale issues?
We would then have 2 Airbnb units, our own office/garage/flex space, and of course our main home. If we ever had to move, we could turn it into 3, if not 4, units to rent out long term or short term (garage could be converted if necessary).
2. Build on a Master Suite, bedroom, sunroom
The second idea is to add on to what we have. There isn't really a true master and our bathrooms are TINY. We could turn the current room we are using as a bedroom (quite small) into a laundry room, play room, office, mud room (there is a door to the backyard in this room) or whatever. Then we'd create a hallway off of it going to a small bedroom (to replace the one we are kind of losing and turning into a multipurpose room) and then a nice Master suite. maybe even add a screened porch off of it leading to a patio area. We have PLENTY of room on our lot to do this and maintain a huge yard.
So... if we did both, the finished product would be a 4/3 home with a separate detached 2 car garage, with office/optional laundry, half bath, AND a 2/2 apartment up top....
Which sounds like a lot for the neighborhood.
But, we don't plan on going anywhere-- family is here and we love it here.
If we DID go somewhere, again, we can always rent it and cover the expenses easily.
The idea is to grow into it, and also, to create investment properties on our existing property that more than pay for it.
What do you guys think? Crazy? Smart? Stupid? Ideas?
Thanks for the help! We've been thinking of this for over a year and it is always evolving.