Investor · Atlanta · Member since 2023 · 52 posts · 16 votes
I am looking to buy a 3/2 SFH near Atlanta that has a full in-law suite in the basement. Its needs a small bit of rehab to get it ready for rent. I am wanting to split them and rent the upstairs separately from the downstairs. No HOA or any restrictions I can think of. Any advice/suggestions of what I may overlook in a venture like this?.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
2y
Check out the zoning by going to the counter yourself. That may influence the price and restrictions/use of the property. Remember the seller and seller's agent do not have your success as a priority regardless of what they may say. All the best!
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
2y
Check out the zoning by going to the counter yourself. That may influence the price and restrictions/use of the property. Remember the seller and seller's agent do not have your success as a priority regardless of what they may say. All the best!
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
2y
Does it have it's own entrance or will they have to go through your home to get to their rental? Sounds like you're essentially renting to a roommate with a few more bells and whistles than room-shares typically receive.
Does it have its own entrance or will they have to go through your home to get to their rental? Sounds like you're essentially renting to a roommate with a few more bells and whistles than room-shares typically receive.
It does have its own entrance. Even its own small driveway and front yard.
Does it have its own entrance or will they have to go through your home to get to their rental? Sounds like you're essentially renting to a roommate with a few more bells and whistles than room-shares typically receive.
It does have its own entrance. Even its own small driveway and front yard.
Only thing you'll need to pay attention to is fully demising the unit with materials that have the proper fire retardancy. For example if there's a door connecting their unit to your unit you would need to either wall that off or replace with a fire door and keep that bolted.
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
2y
@Aubrey Ford, I'm a big fan of this approach. However, one thing to remember about this strategy is how the prospective tenants on the main level/unit react to a separate tenant living below them. Some renters are not okay with this aspect and will overlook your property once you disclose this information. Nonetheless, many will not mind, but these are the folks you need to be careful about, as there's a good chance they will be somewhat "inferior" tenants. As always, proper screening and background checks are crucial.
Moreover, I assume the utilities are not metered separately. Please keep this in mind and confirm the investment is still sound since, technically, you'll be responsible for utilities. Considering this, how would you be able to handle the potential objection of the bottom unit tenant complaining about AC/heating since it's likely that the main unit tenant will have access to the thermostat? Furthermore, what if there is a dispute over parking between the two? I would assign parking spots respectively before leases are signed.
@Aubrey Ford, I'm a big fan of this approach. However, one thing to remember about this strategy is how the prospective tenants on the main level/unit react to a separate tenant living below them. Some renters are not okay with this aspect and will overlook your property once you disclose this information. Nonetheless, many will not mind, but these are the folks you need to be careful about, as there's a good chance they will be somewhat "inferior" tenants. As always, proper screening and background checks are crucial.
Moreover, I assume the utilities are not metered separately. Please keep this in mind and confirm the investment is still sound since, technically, you'll be responsible for utilities. Considering this, how would you be able to handle the potential objection of the bottom unit tenant complaining about AC/heating since it's likely that the main unit tenant will have access to the thermostat? Furthermore, what if there is a dispute over parking between the two? I would assign parking spots respectively before leases are signed.
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
2y
Consider adopting a split-unit rental approach to increase your rental income by renting out the upstairs and downstairs units separately. To comply with local standards and protect tenants' privacy, make sure the flats have separate entrances, kitchens, and utilities. Check Atlanta's zoning rules for any additional requirements for duplexes or multi-unit rentals. Conduct market research to determine competitive rental prices for each unit based on other split-unit rentals in the area. When planning the rehab work, make sure you understand the extent of work required for each unit, including material, labor, and permit expenses. If separate entrances are not already in place, consider installing them, as well as soundproofing, to reduce noise between units and increase tenant comfort.
@Aubrey Ford, I'm a big fan of this approach. However, one thing to remember about this strategy is how the prospective tenants on the main level/unit react to a separate tenant living below them. Some renters are not okay with this aspect and will overlook your property once you disclose this information. Nonetheless, many will not mind, but these are the folks you need to be careful about, as there's a good chance they will be somewhat "inferior" tenants. As always, proper screening and background checks are crucial.
Moreover, I assume the utilities are not metered separately. Please keep this in mind and confirm the investment is still sound since, technically, you'll be responsible for utilities. Considering this, how would you be able to handle the potential objection of the bottom unit tenant complaining about AC/heating since it's likely that the main unit tenant will have access to the thermostat? Furthermore, what if there is a dispute over parking between the two? I would assign parking spots respectively before leases are signed.
Best of luck!
All great points. The utility is one I’m still noodling. But since I’ll be living in it for 12-24 mo the while I rehab it. I’m hoping I can get a really good sense. Luckily parking is already split with the basement with its own walkway. Also the bottom has its own A/C. So good there as well
Atlanta, GA · Member since 2023 · 14 posts · 5 votes
2y
I'm glad you are asking questions on the front end. I just did an analysis for an investor who purchased a SFH conversion to a Duplex without any due diligence. He rented out both units, but when the bottom tenants complained about an issue with code enforcement, the city shut him down for zoning and property use compliance. He lost a bunch of money because he overpaid for a duplex but can now only rent it as a single family. When I inspected the property it looked like a death trap due to code violations. Please check for proper permitting with the city and ensure it is up to code. That is much cheaper than a potential lawsuit or fines.
I second the Separate Metering of Utilities. Including a flat fee for utilities on top of rent will make the rent look higher and less attractive to potential residents and potentially cost you money if there is a toilet running or water wasting. Splitting the bill and charging it back to tenants can also create disputes between tenants if one likes to wash their car every weekend but the other has to share the costs.