Author Topic: Tiny house / Basement double rental idea  (Read 3133 times)

Liberty

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Tiny house / Basement double rental idea
« on: September 06, 2018, 07:42:27 AM »
Hello there,

I've been really enjoying and appreciating the GCC articles, and one that has my husband and me talking is "Renters for Life." We have never been home owners, and would be fine renting our whole life, but we do have a unique situation that may make homeownership too good to pass up.

For the past two years, we have lived in our own hand built tiny house. Including the year before that during which we housesat, this will be 3 years of living both mortgage free and rent free, in exchange for farm chores.

We can't keep it up forever, however, because in about a couple months we will have a total of four young children! It has been a challenge and an adventure, for sure We are willing to stick it out in tiny quarters for now, but are looking ahead for our next step.

Option 1: We watch the housing market (we are in super hot Northern Colorado & looking to stay, as husband's great job is here and we are 10+ yrs from FIRE). If/when prices correct, we put $28k down on a ~ $280k house in a terrific downtown location with a walkout basement and a backyard for the tiny house.

We long-term rent the basement ($800/mo), VRBO the tiny house ($800/mo for 10 nights/mo; maybe we could do even better), and cover much of our mortgage and related expenses that way. Both the basement and the tiny house could provide many years of income into the future this way, even if we leave to travel.


Option 2: In a couple years, we sell the tiny house for ~ $30k, have the $28k down payment amount, and invest both. Rent a downtown house or apartment suitable for minimalist (but larger family) living for $1800/month.


What do you think? I?m having a hard time wrapping my mind around what calculations to do, comparing the sunk cost of a down payment to the potential income generation, etc. Thanks for new perspectives!

gocurrycracker

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Re: Tiny house / Basement double rental idea
« Reply #1 on: September 10, 2018, 12:18:17 AM »
Hey Liberty

Welcome to the forum.

Congrats on your creative housing solution and addition to the fam.

As with most things, there is no right answer. See NY times Rent/Own calculator to crunch numbers on rent vs own

Then I think the best first question is are you happier renting or owning?

A good 2nd question is: what if prices never correct?

3rd: think of any house you would buy like a business. Real Estate investors use the 1% rule as a guide. Would your purchase be a good business choice? See here to start: https://www.gocurrycracker.com/never-pay-taxes-again-rental-properties-guest-post/





Liberty

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Re: Tiny house / Basement double rental idea
« Reply #2 on: September 12, 2018, 08:47:04 AM »
Thanks so much for the resources and reminder about the 1% rule. it's looking like, combining a dip in the market, a need for us to have a place to live, as well as the 1% rule but applied to our own personal house and property, buying would actually be a good thing for us. Lots to think about! And luckily we are in no hurry and can keep living tiny for free for now.

On a related note, I have felt very inspired by your materially light lifestyle most of all. Love the idea of going house free and car-free eventually. :)

gocurrycracker

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Re: Tiny house / Basement double rental idea
« Reply #3 on: September 12, 2018, 10:15:22 PM »
Great! good luck!