5 Things to Consider Before Buying a Home with a Guest House
Have you ever considered the idea of buying a home with two properties? Recently, there has been an increasing demand in interest for holiday homes that come equipped as guest houses. So, before buying a house with a guest house, you should first consider some factors before moving your in-laws and out-of-home friends to your guest house.
What will be the main purpose of the guest house?
Guest houses are a great way to make extra money and enjoy the benefits of living in your own space. Although the extra space can accommodate in-laws, children from college, and out-of-town friends, you can use the guest house for personal use and turn it into an office, home theater, or celebrity pavilion. Renting your guesthouse for long-term rent or short-term vacation rent can be an excellent source of passive income. If you are on a rental route, check with your city for permits or zoning laws that prevent you from renting your space.
Guests can invade your bubble
Guest houses are great for hosting friends and family, but sometimes you may want to avoid the morning backyard chats. Consider your comfort zone if you feel comfortable with strangers relaxing in your backyard, playing music, and having their guests. Carrying out private activities such as tall shrubs, greenery, or fences between you and the guest house is one way to alleviate uncomfortable situations. You need to calculate these landscaping and maintenance costs in your budget.
You may face more hurdles with lenders
The guest house industry is booming, but it’s not without its challenges. You may find that you face more hurdles when looking for a lender because they will adjust their rates and loan options depending on how the property owner plans to use his or her building. Show lenders a record of income earned from your guest house, which will help reduce your risk from your lender’s view. However, lenders on a property with two houses should be prepared to pay you a large down payment.
Does the guest house increase the value of your home?
Guesthouses are a great investment for people who want to make money off their property without having it sit vacantly. You can either rent them out on long-term leases or shorter ones and in some cases, you might even get more than one rental period from tenants. For instance, a low-cost guest home in Seattle may recoup more additional money from rent than one built for the same cost in rural or remote places.
Who Pays the Bills?
When the in-laws and friends are visiting, it can be tricky to decide who pays for what. A better idea is if you rent out your guesthouse or offer short-term vacation rentals so there is no confusion occur between the two parties.