Hi BiggerPockets Friends,
From going down so many avenues on how/when to retire.... Due to work finally catching up with me, one of my thoughts I've been throwing around in my head is the following:
The house I am currently living in use to be a two (2) family dwelling. My parents converted the house into a single family (living downstairs, bedrooms upstairs).
The house currently has 2 zones of heat, floor 1 = zone 1, floor 2 = zone 2.
If my calculations are right... My attic has the potential to become a single bedroom apartment (kitchen/living on 1 side, bathroom central in attic, bedroom/living on the other side).
The "Total" renovation... as I see it would be the following.
Floor #1 - Bathroom is currently 1/2 bath. Plumbing from the "old" washing machine hook-up could become shower stall (tub is not an option). Floor #1 - Complete.
Floor #2 - Bedroom above 1st floor kitchen becomes 2nd floor kitchen (the way it use to be). Floor #2 - Complete.
Floor #3 - The hardest: 3rd Zone of heat added, ALL appropriate plumbing / electrical /gas hook-up. Window on either side of attic would have to become doorway... with flight of stairs down either side of house to meet fire code.
I see myself occupying the first floor.
The total breakdown by floor would be as follows:
Floor #1 - 4 rooms, kitchen, full bath (Total = 6).
Floor #2 - 3 rooms, kitchen, laundry, full bath (Total = 6).
Floor #3 - 1 room, kitchen, full bath (Total = 3)
So, My question: Do the projects justify the rental?
Do the projects justify the rentals? only you would be able to decide that , everyone has different levels of involvement and different means of "justifying"... Personally, i would not be willing to got to that extreme for several reasons.
1- dealing with the city, inspections/permits, and contractors you're talking about serious renovation.
2- is the RETURN worth the investment? how much would it cost to begin,continue, and finish this whole process? and how much would you expect to get in rent monthly, what is the median rent in your area? Are you prepared to deal with screening tenants? will there be a property management company involved to handle maintenance issues with tenants? how would you work the electric, heat, water per unit? How will you handle vacancy, what about insurance on the "new" property after reno?
3- timeframe, probably several months of living in a construction zone, not fun.
4- there are other options for you to "house hack " and be profitable and retain the value of your house, without people stomping around above your head at all hours of the night. *search this site using key word "house hack"
5-why wouldn't you pull the equity from your house ( or leverage your house) and just by a rental property(paid off in 15 yrs by tenants, building equity for further acquisitions, future appreciation AND sale ) where the numbers will give you a specific profit, and you can retain your anonymity and personal space as a LL?
Just playing devils advocate and posing questions that i would ask myself before i went down the road you're thinking about heading down.
Thanks for the feedback.... I went through the various scenarios/costs and what not. So, I fully understand your points... I'm more the type of person that needs affirmation (good or bad), just thought it be worth throwing out to people that have either thought of this or physically experienced it.
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