Renting out a house with an occupied MIL apartment?

Question

I have a huge house that I just added to the portfolio with a nice MIL apartment, which helps subsidize the mortgage quite nicely.

I'm planning on downsizing to one of my other rentals eventually, and am wondering how feasible it would be to rent out the house to one family when I have a tenant in the MIL apartment?

It's a 3,500 SF house 15 minutes from Seattle and Bellevue. The apartment is about 750sf, has it's own kitchen, dining, living, bedroom, bathroom, parking laundry and entrance. It is on the top floor over the garage mostly.

The rest of the house is 5 bedrooms, 2.5 baths, with a huge living room, huge family room, giant dining area and massive kitchen and 3 car garage.

I could rent the main house out for $2,500 easily and $1,100 for the MIL, which would be more profitable for me then the $3,000 rent I would get for the entire house as one unit with no separate tenant in the MIL. It's a $600 a month difference in profit.

Of course zoning might be an issue, as it's zoned single family. I think since it's technically like a room mate in my situation, it's not considered multi family. But if I moved out and rented the two units out to seperate families....

Jack B. · Answer

I think I found a solution that meets my needs, though will have to try it. I could move into the apartment, rent out the spare rooms in the house, and keep the garage which is below the apartment for myself. I actually make more money by the room, and this way I get to keep the garage since they are only renting rooms from me. Only issue I'm looking into is max number of unrelated individuals in Renton, haven't found code for it yet, but most cities seem to allow only a max of 4 unrelated individuals to a house.

Cool thing with this method is I'm still close to Seattle, and have all my living expenses other than food and cell phone paid for via the rents. :-)

Jack B. · Answer

I've thought about ABNB'ing the MIL while I'm living in the house since it is 10 miles to DT Seattle and Bellevue. You're talking about ABNB of the MIL while I rent the house out? Same thing either way, no? As far as noise, zoning, etc.

Yes, apartments are noisy, but houses are not supposed to be. While the apartment tenant may not mind the noise of the house tenants, the house tenants will likely not enjoy the apartment tenant noise.

Account Closed · Answer

I think you might have to give a break on the rent for the large home, but for a deal on the rent, they'd probably be fine with the separate tenant over the garage, since that unit is so separate.  Then, you should be able to get full market rent for the MIL unit, from a tenant who expects to have to live in an apartment.

Then, figure out what the parking rules would be, and who gets to use what yard space, etc.

I kind of like the idea of renting them out separately, so that you don't lose all cash flow if one tenant moves out.

Account Closed · Answer

I'm confused about how separate the two units are.

I would suggest picturing yourself as either tenant and what the potential problems would be.

As far as the legalities, if it's not legal, and there's a problem with a tenant, you can anticipate being bitten in the rear.

Jiri Vetyska · Answer

I also live in Renton, and the rules are most likely the same in King county anywhere, but single family home is for up to 4 unrelated adults.

Jack B. · Answer

Alright, I'm going to consider the apartment as an ABNB unit with the house rented OR keep the apartment leased and rent out the rooms in the rest of the house.

Apparently rooms in my area rent for much more than I had anticipated for this house/area (inflation thank you so much). I can rent my extra rooms for $700 a month, as the going rate in my area is $700-$900 for a room! The other option is to rent out the rooms, which will be more work, but less likely to involve noisy kids. Plus I can keep one of the smaller rooms for myself and "live there" in case anyone tries to complain. Alas, I need to see if Renton has any limits on how many unrelated people can live in a house. Lot's of cities in the area have rules for this stuff now...

Must say it feels good to buy houses. The house I bought is huge and if I ever fall on hard times besides equity in the rentals, cash flow, savings, etc. I can always rent out the rooms in the house I live in temporarily as well. Not ideal but if it means not losing the house...

Troy Fisher · Answer

Just remember that tenants are going to accept more "minor" issues to have affordable housing in the area.  Also with the AirBnB of the MiL you are not going to have as much occupancy as another leasee and it could lower the noise factor.

Troy Fisher · Answer

Best to check the specific zoning of your parcel.  It may already be duplex zoned.

Also I'd not over think it; Apartments are noisy, and as long as there are separate entrances/laundry facilities it shouldn't be too much trouble as long as you can figure out how to handle the separate utility billing to the tenants.

If that seems like too much maybe you can AirBnB the MiL?

Jack B. · Answer

I might add that my girlfriends mom rents a house down the street with the landlords brother living in the MIL apartment below them (basement). So I suppose there is a market for it. I will say it works out for them because they don't hear him though I'm sure he can hear them on the hardwood floors above him. Probably explains why he is gone from early in the morning to late in the evening even though he is retired. Probably doesn't have a lot of choice of where to live so he deals with the noise by being gone all the time.

Renting out a house with an occupied MIL apartment?

Most Popular Reply