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Updated about 5 years ago on . Most recent reply
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Mother-in-law apartments- Good places to look?
Hi all,
My wife and I have been renting in SLC for the last 6 months saving up for 20% down payment on a house with a Mother-in-law apartment near our work in SLC. I've found some decent homes costing roughly $1.25 per sq. foot around Salt Lake county, and also found some much better-priced homes with MIL's in Toole/Stansbury Park.
Where are some good towns within 1/2 an hour of downtown SLC to look for houses with MIL's? Has anyone had any experiences they'd be willing to share with owning a house and renting out the MIL apartment to cover mortgage?
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Howdy Jeremiah!
If you have 20% to put down you might consider purchasing a duplex or 4 Plex. If the 2nd unit is legal the bank will allow you to use its income to help you qualify, which will allow you to buy a bigger and better property. It also might be more tax efficient because you could separate the units and claim one as your primary and the other as a rental, but I'm not a tax guy so check into that.
When you go to sell the single with MIL your buyer pool will be limited and the extra unit that you think so highly of might not be important to the person looking to purchase your home. If it's a true multi then you know you're selling it to a like-minded investor.
For the right situation, I like the FHA owner occupied 3.5% down program. The low down forces PMI on you and you have a higher payment (more leverage) but If you intend on living there and can stomach the higher payment this will keep more of your savings liquid for repairs or another down payment!
Location- Personally, I invest exclusively north of I80 and east of I15 in SLC. I live, work and play here so I understand why people would want to be in this area. As the population continues to grow downtown will continue to densify which will support more businesses making the area even more attractive to live in, especially for those tenants you want to pay top dollar to live in your basement. However, if your open to living on the west side I'd buy something in the Glendale area between the I215 and I15. Little dicey for my primary but that area is going to see really good growth in the mid-term.
I will ask for another 60 seconds of your attention and this is the most important. Please don't let the tenants know that you're the owner. It might seem trivial but your safety and headspace will be greatly improved if you don't. It will save you from late night maintenance calls and mental anguish of people telling you every reason that they are late or cant pay. To top it off people can get really weird really fast when it comes to money and you want to separate yourself from that emotion.
Best of Luck
Jordan
TAG SLC