Hi - I have a second house on my property that hasn't been lived in since 2005. Who can I turn to for honest advice on what to do with this? It needs a lot of renovation to be rentable. Or maybe I should just tear it down. Who can help me decide?
Talk to a couple of realty firms in your area? They might be able to do a market analysis on rental prices in your area. This could give you an idea on how much you could likely rent it out for...when the renovations are done. The renovations may be much costlier than the income of several years of renting.
Taxes on a dwelling are also a consideration. (both if you renovate and if you raze the dwelling) If you do decide to tear it down, it should reduce your property taxes too.
I am sure that it varies from one place to the next, and perhaps you would be "grandfathered", but in our town you cannot have two residences on one lot.
Also, if you make it a rental, the tenants will be your neighbors. The good thing is that you can manage it better, but it may also devalue your property if you need to sell.
I wanted to add another thing. Check with your local code officials. In our neighboring town, if it has not been continuously a rental, it costs $1000 to make it one.
Great ideas already posted here. "jdhomeowner," and btw, "Welcome to the Real Estate Boards!
I'll add a few ideas. First, hire a home inspector to determine where you stand with compliance re rules and regulations for rentals. If you don't know one, ask several real estate agents who they use to do inspections on their properties and then choose one to do a thorough inspection.
Then, request written itemized bids from at least three licensed/bonded contractors in your area re what it will cost to bring the property into compliance and renovated to make it attractive to prospective renters - compare the three to see if making it into a rental is feasible.
Next to do, consult with a CPA regarding the tax consequences - both negative and positive - since this is also your primary residence.
Finally, consult with an attorney well versed in real estate to find out the applicable zoning regulations and rules in your area and to draft a preliminary rental agreement so you will be aware of the responsibilities and obligations landlords have.
All four of these need to be done BEFORE you even consider taking a step forward. Skip a step and, like Humpty Dumpty, it can all come crashing down around you!
Good luck, it can be a profitable endeavor or one filled with pitfalls - move wisely! This message has been edited. Last edited by: Idaho Resident,
I wouldn't waste a Realtors time to determine rental value, until you get
a contractor there to see if the place is habitable and structurally sound first.
In addition, why pay a Home inspector $300-500
when you can get a free bid from contractors.
Good point on the grandfather in zoning, which may be the case. Once you tear it down, you may automatically convert to present zoning in your neighborhood. 1 house per "x" square feet of land.
Call your local zoning office and ask questions about zoning law in your town or city. Zoning laws vary quadrant to quadrant, town to town, county to county, state to state.
Because contractors might not know the local laws re inspections issues? Yes, they can build to specifications BUT someone has to tell them what those specifications are...
Good luck, post back how this turns out!
THANKS TO ALL!
You guys are great. I had the front house inspected a couple of years ago to help me with prioritizing repairs, so I may ask him to come. I'm afraid if I start with contractors, they will advise me to renovate, just because that's their business.
A second house as a rental is pretty common around here, but I've only had relatives living there before.I'll post again as I make decisions.
You're welcome - looking forward to when you post back after getting some more information!
I have same query like you and your thread helps me so much in it. Thanks for make such a useful post.
IMHO it's premature hire anyone! especially when county or city code requirements are available; usually online. Make an appointment to discuss your plans and concerns with local Gov't representative....it's free.
Once viability has been established, estimate expenses to bring the house up to basic liveability standards Vs anticipated rental income to determine cost effectivness.
Should you find it would be less costly to demolish that house, contact your local fire dept - they may want to use it for training purposes.
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