What to do with 3rd Flr of a Duplex?

Question

I'm purchasing a duplex with a 3rd floor that is mindblowing. Very spacious! I understand that I legally cannot rent it out as a 3rd apartment because it's a legal 2-Family, which is probably why it was never fully finished. But what should I do with all of that space? There's no way I'd allow it to just sit empty like it is currently.  I'm looking for ideas of what to do with the space that could possibly net me some additional income. The plan is to fit the space with a full BA, BR, mini kitchenette, and a large open living/dining space.

An Airbnb is one idea that I'm tossing around. The second idea is renting it as a long-term "room" that is an extension of unit 2. Another idea I had was moving into it myself and then renting out the rooms on the 2nd floor. It would still be my apartment, I'd just live above it mainly.  Any other ideas of things I could do to monetize the space without getting into any legal issues would be appreciated. At the end of the day, even if none of these ideas pan out, I'd still have an epic 3rd floor for family and friends when they visit.

Patricia Steiner · Answer

Forget current tenants...consider renting the space out to someone who needs an office away from home (a lot of folks are finding that working at home with kids and pets is more than most mere mortals can bear) - or as an artist loft. In some areas, that artist lofts commands more rent for no upgrades.

Great problem you have there...

Patricia Steiner · Answer

I find that neighbors become concerned/upset by:

1.  Different people coming and going at all hours - never the same people - like with a vacation rental

2.  Increased traffic and parking issues on the street.

3.  Noise, poor "adulting."

How this is different is that you'll probably be renting to a homeowner who needs a place to escape for a few hours every day to get something done - or to think without the demands of house, kids, phone, etc.  They may walk/bike over; if they drive, it's one car for a few hours.  They are hiding...they don't want people to engage them.  The artists go into some kind of zone (I have no artistic ability so no zone for me!) and others are trying to study, apply for grants/patents/more.

Just market it as what it is and then have the renter (don't even use the word tenant) tell you how they work and how they will use the space.

You've got this...

Carl W. · Answer

Dare accepted. This is a game-changer! It leaves me open to a sea of possibilities.  I did some research though and in my area Artist Lofts are considered living spaces. Artist Workspace and Flex Space seem to be the terms used around here for non-living spaces. My only concern is would there be anything to prevent anyone from moving into the space and just living there if they wanted. I guess I'd have to create a lease stating the place was strictly for work purposes because it's in a residential neighborhood. If it was commercial, it'd be different. Heck, when I signed my lease for my office my landlord told me I could put in a bed and live there. I looked at him like he was crazy. Who lives in their office? Actually, I discovered that a lot of people do. In commercial zones around here, no one cares, it's whatever. But in residential zones, neighbors talk and word quickly spreads and complaints are filed. I would want to avoid that as much as possible. Thoughts?

Patricia Steiner · Answer

@Carl W.

Correct; renting out the loft as an "Artist Studio or Loft" means it's a private space for an artist to paint, sculpt, write - it's a creative not living space. Most major cities have an industry surrounding this type of real estate. It's along the lines of an office.  What makes it attractive to investors is the obvious revenue stream but without having to provide a kitchen or updated decor/space. Writers, inventors, med and law students getting ready for board exams - anyone who needs space away from their homes to think, create, do - and be left alone.

Many investors "stay in one lane" and miss opportunities to diversify and add alternative revenue streams.  Offering storage and/or laundry as secondary streams come with liabilities of a different kind and limited potential.  Know your market.  Innovate.  I dare you...

Carl W. · Answer

Artist loft? Never heard of that before. It sounds like the perfect idea. So an art would use it as a workspace but wouldn't actually live there?

Gus Pages · Answer

You could offer storage space to your current tenants for additional charge. Not sure of the legalities behind it, but you may be able to offer storage space to anyone. Throw some cages in and see what the market rate is.

Best of luck!

What to do with 3rd Flr of a Duplex?

Most Popular Reply