Real Estate Agent · Ormond Beach, FL · Member since 2017 · 215 posts · 158 votes
Hi All! I am a new"ish" investor and looking for my second rental property. In my area I see a lot of "Mother In-Law" apartments and other non-legal 1 bedroom tack ons... often these are garage conversions. Are these properties worth my time considering? What are the pitfalls of renting a non-legal space? Anyone dealing with this situation? Thanks!!!
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Kristin Kiddy the answer to this is incredibly location specific. What you are really asking is can I get a great tenant to rent the space so that my cash flow is stable and I have low headaches. In my area in the Chicago suburbs, the answer would be no. In your area, the answer could be different.
Also, keep in mind that illegally built spaces were normally not built by the top contractors. This means that your holding costs will be higher and you will have more annoying issues come up keeping these spaces working.
Lastly, what is your local municipalities take on this? Do they allow these spaces to be rented? Obviously, you mentioned the word illegal, but this is also incredibly location specific.
Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes
8y
Check the local zoning rules. Basically your looking at a non confirming duplex.
Accessory apartments may be allowed, but often come with a requirement that the primary area of the residence is owner occupied.
People get away with renting both sides of a non confirming duplex all the time, but that can end real quick if a neighbor complains to the city.
Real Estate Investor · Austin, TX · Member since 2016 · 114 posts · 49 votes
8y
As Blair said, check the local rules. It may be helpful to go to the Zoning or Building department/commission, and ask about retrofit status. Some places will let you register/retrofit an existing unit provided it meets current code (or met code or fire compliance). It may be an additional hassle but could be worth it in the long run. Last thing you need is a complaint that a unit is illegally occupied and have to worry about getting the tenant out.
Real Estate Agent · Ormond Beach, FL · Member since 2017 · 215 posts · 158 votes
8y
Thanks everyone. Great Advice! Thanks Gagan P. I didn't think about that option. I'll need to decide if I want to take on that kind of project/headache/risk.