Hey Bigger Pockets Arizona! I have found a few properties in Scottsdale/Phoenix area that have detached garages that seem to be a very easy conversion to living quarters.
I am thinking of picking up one of these properties, slapping a 203k loan on it for home renovations, fixing up the living quarters, and renting out the main unit. My own form of house-hacking.
- Does anyone have experience with this in Scottsdale/Phoenix/Mesa/Tempe/Gilbert?
- Before making an offer, how can I be sure this is allowed before having to pull permits?
I can't say I have experience in the area, but a realtor should be able to give you some guidance, and a local contractor would probably be even better. But have no fear of calling up the zoning commission and asking some general questions - they're going to have the most in-depth knowledge of the area and what things are/aren't permitted. You don't have anything under contract yet, so you don't have to worry about painting yourself into a corner. (I think it's a great idea, btw, good luck!)
Are you planning to rent the main unit short-term or long-term? If short-term, just make sure you're also familiar with the local regulations regarding short-term rentals, as well.
I’ve been thinking this would be a great strategy for Airbnb in the right situation. It could allow 2 different units to be rented on the same night. It would be really nice if the units could have their own feeling of privacy as some people may not like the feeling of another guest so close.
In my experience it really depends on the property for converting a garage to living space - as far as what process you need to take. Sometimes these old detached garages in Phoenix are labeled as “workshops” on the assessor’s site and therefore they list the square footage on the site. In those cases I tend to feel it’s easier to get a green light for work without permits being involved. If that’s not the case then chances are a permit is necessary. I tend to get advice on those issues from contractors because they go through so many of those situations first hand.
@Lucas Carl sorry which forum should I be on....?
@Lucas Carl it’s really no different than a studio if done correctly.
@Kellen King I get that but again, as I've said many times as a regular on the STR VR forum I would never be interested in "airbnbing" a garage, closet, studio, condo, hammock, or single family home in a residential area with neighbors that have a right to complain.
My 5 VRs, which I self manage remotely, are in the Pigeon Forge Gatlinburg area.
13 million tourists per year
12 thousand residents
Although! I did have a dream last night that Airbnb opened their own line of hotels and they were gorgeous.
We've done this a few times, not as a vacation rental but with spec builds. If you are going to get a permit in the City of Phoenix, you can add a bathroom, closet and kitchen to a detached structure as long as it doesn't have a range. For some reason, they view this as the dividing line between single family and duplex. You also can't indicate that anyone would sleep there. Therefore, no part can be labeled as a bedroom. We built one at our own residence and they actually made me change the verbiage on the site plan from 'casita' to 'detached office'. You will want to verify this on any particular property you are looking at, but this is the response I received every time we built one in R1-6 zoning. Once it's built, no one is gong to regularly inspect the property to see if anyone is sleeping there. However, if you have an issue with a neighbor, they may have some recourse as the zoning technically does not alloy separate living quarters.
Also keep in mind that if you are going to add plumbing, you will want to check and see if the sewer tap is in the the back of the property or the front. If it runs to the front, you may have an issue getting proper sewer drainage slope to the tap. If it runs to the back, it should be fairly easy. Hope this helps.
The best contractors will tell it like it is even if it’s not what we want to hear regarding zoning and permits. Unfortunately those are usually the more expensive contractors...and my team can’t usually afford them when flipping a standard home. One of my least favorite parts of real estate is zoning and permits. It’s even hard sometimes to get the same answer from different people at the city office when visiting on different days. Lots of jumping through hoops. Honestly this is somewhere I’d like to personally improve. How’s did you learn so much about it @Michael Hacker ?
Originally posted by @Jonathan Safa :
@Julie McCoy thank you for the advice. I think some calls will be well worthwhile, yes. Main unit will probably be a long term renter. Would love to put someone in there at a discounted rent if they help manage the rear unit as an Airbnb. Or just use the rear unit for myself. I feel only good can come from multiple live-able structures on one property...
Thank you again!
Sure thing! If you're planning on a long-term renter and using the smaller unit yourself, I guess that makes me curious why you posted this in the short-term rental forum? :) (that said, completely agree that multiple structures = awesomeness. My first property has a garage apartment - I use the main house as an STR and keep the apartment for myself, and it's great)
@Julie McCoy oops, the forum category was a mistake! I probably naturally went there because I'm so used to posting on forums about Airbnb lol (I have a few homes listed on Airbnb in Southern Cal).
I am torn though. I think using the main house as a Short Term Rental could be great! I need to explore the options here! lol
@Jonathan Safa It seems like Scottsdale is an area that could do well with LTR *or* STR, so it's fantastic to have options! (e.g. if the laws change and outlaw your STR, you have a good fallback as an LTR) I'd say research each possibility and do what's going to be best for you. :)
@Kellen King You are absolutely correct - sometimes you can ask 3 different people at the city the same question and get 3 different answers. Honestly, I just learned from experience and trial and error. We've dealt with this on 4 different properties now so we've learned to work every possible angle we can think of. Most of the plan reviewers are actually very helpful and easy to work with if you are friendly and polite.
@Jonathan Safa Yes, these types of problems are possible, probably not that common but it's actually happened to us in the past. You would most likely have to apply for a variance which can be a long and expensive process and there is no guarantee that the city will grant it. Whenever we get a property under contract we always go to the building department and speak with site planning before paying the earnest deposit. You wouldn't need plans, just tell them what you would like to do, they will pull up the satellite image of the site and tell you if you are going to have any issues.
On a side note, you mentioned setbacks - one of the benefits of detached structures is that you can build them in the rear setback up to 3' off the back property line. If you have an alley, you can actually build them on the property line. This gives you a lot of flexibility in designing the outdoor space in the back yard. We are actually designing a scrape / new build project with this in mind right now, here's an image of the concept for reference.
@Jonathan Safa how did this turn out?
Anyone know for Scottsdale if R1-7 has similar rules to the R1-6? I'm looking a house with a large garage already built and considering this exact strategy. Looking through the city code the best thing I can tell online is that R1-7 doesn't allow 2 dwelling units, but I don't see the wording about a workshop.