building new apartment in backyard
Hi all,
If I built a carriage house or granny flat in the backyard of one of my rentals and let's say it costs $80k, and I pay for it with cash, what would I need to make in monthly rent for it to make financial sense? I know that for preexisting homes with a mortgage payment I try to get at least 1% of entire value of the home each month. Does the same 1% rule apply for a house that is paid for with cash since you're not paying a mortgage and interest, etc?
Is it even worthwhile to build an accessory apartment? There aren't any rental deals that make a lot of sense where I live, so I figured building on property I already own might be a good option.