Greetings fellow BP friends. I have a few quick questions for any of you familiar with renting/landlording in Provo City, specifically relating to their rules on "accessory apartments."
I went under contract this Saturday for a SFH near BYU in Provo and am in the due diligence phase. I will find out in the next few weeks (before closing) whether or not I will be attending BYU for their MBA program this fall, and if I am accepted I was planning on moving into this home and "house hacking," aka living in half while renting out the other half, for at least the two years that I'm there for the program. The home was recently remodeled upstairs but has an unfinished basement; however I have included this in my budget and plan to finish it by adding a kitchen and bathroom so that it would be rent-ready by Fall 2019. I have a few close friends that are investors with their own rentals and house-hacks here in Salt Lake County where I currently live, who have told me they've never gotten permits for remodels and rentals like that, and have never had any issues. I trusted their experience and proceeded with my offer and am happy that it was accepted.
However now that it has been accepted, I've been feeling a little extra paranoid about making any assumptions, as I went to BYU for part of my undergrad and have now been remembering how strict Provo City was with parking enforcement when it came to parking on Provo streets. So I figured I'd better do a little more homework digging into the fine print on all the rental rules, since neither my landlord friends nor myself have experience specifically in Provo yet and I'd really like to avoid making any expensive, incorrect assumptions.
I've found the following information from Provo City's website regarding "accessory apartments" which is the source for the rules so far as I can tell:
1. How strictly does Provo City enforce this, and how do they enforce it? Do I need to worry about getting the "accessory apartment" approved/permitted ahead of time by the City, and/or my remodel plans for finishing the basement? (Or could it be worth just proceeding and risk dealing with any issues, should they arise, like my Salt Lake County landlord friends do?)
2. I don't think the house I'm under contract for has enough room to accommodate off-street parking for 4 vehicles, which the City code seems to indicate is required. It has a 1-car garage and a driveway, but I would think it would realistically fit 3 cars max, including the garage. And I believe it's only a single-wide driveway (only room for 1 car across rather than 2 (I'm in Salt Lake City so I haven't driven back to double check that since I first visited the property)). Is there a measurement anywhere indicating how they calculate that required amount of space? (EDIT: I think I found this measurement). Does this mean they require side-to-side space for 4 vehicles? or is front to back acceptable? If there ends up not being enough room for off-street parking for 4, should I expect the City to hold strictly to that and therefore not allow my accessory apartment?
3. My original plan was to buy the house and finish the basement, house-hack while attending the MBA program, and then move out and rent it as a duplex after that. However after going through all the zoning rules as closely as I could this weekend, it looks like that will not be allowed as the property is zoned R1 (which seems to permits accessory apartments, but not using the house as an actual duplex). Am I interpreting that correctly? If that is the case, it's not necessarily a dealbreaker because I think the property may potentially still cash flow just as one rental (rather than a duplex) for a small family if I were to need to move sometime after the next two years. I've heard the City is strict on not allowing duplexes where they shouldn't be, so I probably wouldn't risk that.
Anything else I'd want to be aware of??? Like most of you, I don't like surprises so I'm trying to learn as much as I can about this situation before I'm married to it. Thank you for your help!
First off, I'm glad you're doing your research. I've had to pick up the pieces of far too many situations where people have bought properties that weren't zoned right, overpaid based on inaccurate expectations, and then got hammered by the city. The city council adopted a list of priorities in 2018 and the top of the list was zoning enforcement.
So far you're on the right track. The city does enforce heavily, but they do so on a complaint basis. If you ever hear of someone say "I did XYZ and I am doing just fine", they usually leave off the rest of the statement which is "because I haven't been caught yet". I've seen the city require the entire removal of the kitchen. I've seen owners charged with misdemeanors. Some owners consider it acceptable business risk, but that's a pretty expensive investment to play chicken with the city.
There are enough rules in the city that I highly recommend you go through the permitting process. It adds more value in the long run when you go to sell it when you can say "legal accessory apartment."
From an email exchange I had with the city's most senior official on the matter when I was working on a similar challenge:
"We don’t use the term "mother-in-law apartment" because it is just a one-family home with more than one kitchen. As such, our ordinances permit only related members (family) to reside in the whole house. This can be done anywhere in Provo without respect to the zone. Owner occupancy is not required; a renter can have their family members residing with them and using the 2nd kitchen. Zoning does not care if money or services are changing hands (rent) nor do we care if there is a separate entrance. This home would have only 1 address.
"An accessory apartment is an accessory unit in a one-family home that is recognized and permitted by the City to be rented out to unrelated persons. The home must be owner-occupied in order to use the accessory apartment and the home must be located in the appropriate zone. This situation would have 2 addresses."
If you want an accessory apartment, I'm 90% sure it has to be in an A-overlay zone. Definitely don't hold your breath getting duplex status, it's extremely rare to get a SFR converted to a legal duplex.
Regarding parking, that's become a more hot button issue. It simply says "off street parking" but they allow a garage and the driveway in front of the garage to both count. In the rentals I manage with long driveways, parking tandem (one behind the other) has been approved and counted in the total.
Hope that helps! Feel free to reach out if you want to discuss more.
@Jeremiah, thanks for the quick and detailed reply. I really appreciate it, and that is really helpful. I will call the city this afternoon to clarify a few of those things. My original plan was to just roll with it either way, but again remembering back to how strict Provo parking was has made me a little more hesitant. So we'll see.
Would you have an email for that person you spoke with you'd be able to share by chance? If not no worries.
This is exactly how I got started, bought a home in 2017 and immediately put a basement kitchen in, it was not a "legal accessory apartment" but we never had any issues when we lived there. My wife and I moved out (we bought a duplex) and then started renting it out up and down, a few months went by, and what do you know good ol provo came knocking on the door. I was suppose to get a letter or something still haven't received anything from them but now we are in the process of selling our home.
My advice is if you can buy a legal duplex, or bigger, do it. The inherit problems that come with renting a single family home out as a duplex are stressful and in my opinion are not worth the stress. I self managed both of my single family homes that we rented up and down and its a recipe to get burned out.
Hope this helps with your decision making! feel free to DM me, always wanting to help!
Good luck :)
Thanks for sharing, that's super helpful to hear your firsthand experience. That's kind of what I've heard from a few different people, and honestly I think you're right. It changes the risk of the investment when there are extra risks like that from the City being a little more aggressive.
I've continued moving forward with my deal, and I think what I'm going to do is move into the house and live there for the first year or so, then move and rent the whole thing out as one rental to a couple or family. It's pretty close to BYU, and has a little more square feet and rooms than most of the other homes in the neighborhood but is in a quiet family-type neighborhood that I think would be appealing to a young family hopefully. And I think I could probably rent it out for enough to cover the mortgage as well. And as far as I've seen, any house can be rented out to someone else without issues (right?).
So I think that's the plan at this point. It obviously won't cash flow as much up front, but also won't require as much time or money up front (won't be adding the kitchen) and will be at more of a risk level I'm comfortable with. And if I can, I'd like to just buy and hold it for the long term so ideally there will be some appreciation of the property value and rental rates down the road.
Sounds like a good plan! I thought about renting out the whole house as well but the upstairs tenants are still there till October. I would just make sure on the zoning but you shouldn't have any issues with renting out the whole house.
Best of luck in the future!
@Chad Davis Got it. That makes sense. Thanks, you too!
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