Buy house with MIL apartment as primary residence?

Question

I have a few single family homes in the greater Seattle area and am looking at buying another house. It's a large house and has a MIL apartment with separate laundry, entrance, kitchen, and bathroom. It is a studio but setup to be able to convert a section into a bedroom.

I like the house because it is close to Seattle for commuting (though I currently work mostly from home, but planning ahead) and is about a half a million. The house itself is nice, and in an upscale neighborhood with no HOA (hooray!).

Anyways, is it a bad idea to have a MIL apartment rental? One thing I've considered is that if I move out of the main house and convert it into a rental as well, the utilities will not be metered. Perhaps I could give them a $100 discount per month to cover the MIL utilities or something?

Or perhaps I would be better off buying two properties with the money, each worth about 250K? The MIL apartment situation allows me to switch to living in the MIL if I want and slow down a bit if I wanted, while renting out the top two floors (the main house).

Michele Fischer · Answer

Is the MIL on one level with no stairs?  There is a huge market for property with a place to keep an aging parent nearby as their health fails.  So if it is handicap accessible, that is a huge plus.  The going baby boomers are going to change housing needs in the coming decades.

As far as separate metering, that isn't a huge deal.  Many would tell you to get it separated, but we have a property in that situation for e water/sewer.  We charge each party market utilities as part of their rent, and monitor the actual.  If they were consistently over market we wold give them a warning and tips on how to conserve, then eventually raise rent.