Opinions on Coach Houses?

Question

In Chicago it's common for multi-family buildings to have a coach house behind the main building, which 120 years ago was legitimately for storing your horses and carriage, but now has been converted to an additional unit (sometimes very nice).

I worry that this basically brings me twice the expenses/maintenance.  Two roofs, two heating/cooling systems, etc, with only one additional unit's rent to cover the expense.  I'm curious if anyone here has experience owning/managing a property with a coach house, and what it did for your expenses.

Jen V. · Answer

Agreed with above - and they are more and more rare in Chicago these days.  They are GREAT for renters since they offer the privacy and amenities of a SFH without the price of one.  I have clients who cover around 80% of the mortgage on the rental income alone from the coach (up from about 55% four years ago, with the rent increases in the area).  Good luck!

Lumi Ispas · Answer

@Nicholas Bailey , coach houses are a plus in Chicago. I sold a 3 flat + coach house about a year ago in Logan Square where the coach house alone was bringing $2600 a month in income. That is a $30,000 in income per year, more than a lot of 2 flats in the city. I have another building with coach house under contract now where the coach house has two units and the income is $2700 a month and all separate utilities. I love these types of deals and I look for them purposefully!  Imagine another $32,400 in income per year and my client is just paying the water and common electric for that coach house.

While the city doesn't allow you to build new coach houses, it allows you to renovate them!

Look at the income that home will give you! Usually, to have that home under the same PIN number and mortgage as the front building, it is very rarely not profitable.

Good luck to you!

Mark Ainley · Answer

@Nicholas Bailey  The issue I have ran into and hear about is the city comes down harder on coach houses for compliance.  Similar to how they come down on garden apartments even when they are legal.  We did the rehabs right so it didn't effect our maintenance in an adverse way.  We always encourage tenants with cats on these coach house units with the rat and mice issues the garbage brings.  I know sounds funny!

Michael Facchini · Answer

I like them, and many of my clients have had favorable investment experiences with them.  True it's another roof to repair, but you typically realize higher rents/returns....as has been mentioned.  They are also in shorter supply, and as a result can be more desired by the investment/rental community.

Ray Harrell · Answer

Your original question is indeed true. a 2 flat + coach will be more expensive to maintain than a 3 flat for the very reasons you identified (2 roofs, more siding, more doors, window, etc). But you can also rent a coach house, if it's one unit, as a "house" and not an apartment. There are pros and cons.

Nicholas Bailey · Answer

Thank you very much for the replies.I guess I was comparing a 3 flat under one roof with a 2 flat with a coach house (i.e. 2 roofs, 2 foundations, 8 exterior walls etc) so I was thinking it'd be significantly more expensive to maintain.

Brandon Sturgill · Answer

@Nicholas Bailey It all depends on the quality of the building and the degree of renovation...if this is a non-renovated structure...you'll have a ton of headaches...if it has been brought to code and is suitable for occupancy with decent systems (HVAC, water heater, electric, plumbing), and on city water and sewer, you're golden...should be a great additional profit center for your investing...

Opinions on Coach Houses?

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