We recently bought a home in a high income/ownership historic area where carriage/back houses are pretty common. Our house doesn't currently have a garage so we are toying with the idea of building a 2 car garage with rentable living space above. Carriage houses in Memphis Central Gardens rent for anything from $550 - $950, (depending on size) and the renter base is usually a single professional working downtown or relatively close to midtown.
Right now, we are having an architect draft plans but I'm wondering about the best way to go about financing the build. Of course, the rent would help to subsidize the build and long-term, the structure would add value to the property but what options are there other than HELOC? I don't think a 203(k) is even possible for this...
Has anyone done something similar?
I dont think you can get a mortgage type loan as you already have a loan on the main house. You also need to make sure you can have one built in your area especially of its a historic area.
If you can get a heloc that would be best but you will need to have a ton of equity in order to make this work. I would guess this project could cost you close to $50k or more.
Thanks Curt Davis. I have checked and it is allowed. The architect and builder have done these builds before. I'm a little gun shy about tying up equity for this because it would be a while before the place is even ready for occupancy. Still chewing on it because we will do it, just a matter of when. I appreciate your input!
I lived in a wood frame 1925 house with K&T wiring for 18 years. The house never caught fire. One outlet quit working - that was the only problem. To sell it, I had to have the house completely rewired. When the electrical contractor finished, my plaster walls were still in their original condition. The house had a crawl space and unfinished attic. The moral of the story - always get lots of estimates. Each one teaches you something and you will tell who the good companies are. Also, I never use a company whose estimator doesn't look at the actual job. Some just hate to get dirty.
The Zoning board may not allow you to do any improvements that are not true to the original structure. You may not be able to even point brick, paint or change the roof unless it it a color match to the original. If you are working with an architect you should address these items before you do any massive investing. It is easy to buy and could be difficult to sell historic properties. Many investors are forced dump them when they find out the true cost of improving houses in historic zones.
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