So, I have this crazy idea after reading the first few chapters of Craig Curelop's The House Hacking Strategy. I am a new, green investor with big ideas willing to sacrifice. My fiancé is not as gung ho because this is his first house. However, we both want to make passive income and are willing to learn along the way. My idea is we have this big detached garage with a small separated space the previous owners started improving. It has about 5 feet in countertop space and a deep outdoor sink. I want to add a bathroom with shower and sink, lay floor, insulate the walls, put in an air conditioner unit/heater, mini fridge, bed, etc to make a studio that is Covid safe for both tenant and landlord as a short term rental, AirBNB, or even long term since a popular college is about 15 minutes away. I have no idea how to go about this. I talked with my county briefly, and they explained that since I'm on septic and want to add another bed/bath, I would have to get a perc test to see if I can add another septic when mine fails and have a engineer draw up those plans. Has anyone done this before? Is this a good idea? What problems should I look out for? Any advice would be greatly appreciated as I move forward. I cannot wait to start house hacking, and thank you in advance!
Converting the detached garage into livable unit would be great. It just becomes a matter of cost and feasibility. I would talk to a few general contractors that do additions/conversions and see what they say. I'm sure it will be possible, just a matter of how much money it will take to make it work. From there, you just need to compare how much it was cost to get it rent ready and how much it will rent for. Just random numbers, but if it costs you $50,000 to do and you rent it for $1000/month that's a 24% annualized cash on cash return. It will then take you 4 years and 2 months to recoup that $50k. It's up to you to determine if that is a good deal or not vs finding an new house hack.
@Matthew Brill That’s some really great advice. I’ll have to start at the end and work my way backwards to figure out how much it costs. I’m not sure if my fiancé wants to stay that long, but now that I have something actionable, I can crunch some numbers. Thank you so much!