To Build Multi-Unit or Single Family Home

[Kevin Doyle]

I've been a longtime follower of BP but this is my first post.  

I am just finishing remodel of my second rental (SFH) and planning for a new rental build on a 1ac lot I aquired a year ago. Currently old house and mobile home being torn out/down. Shared well, separate 3br septics that have been inspected and are good (Have to add a holding tank per Health Dept. as new regs require 500 gal holding per bedroom and both are 1000gal tanks).

This is a country setting on outskirts of town (7min drive) and 1/2hr to 45min to 4 major cities where most employment is.  There are only single family homes in the immediate area and you don't see multi-unit until you get into town.  There is a mix of small to medium sized ranchers, cape cods, split foyers and colonials (850sqft up to 3000sqft) spread throughout with some mobiles mixed in.  There are a few rentals but not many in immediate area.  I live right up the street and plan on staying here forever so my rentals are next door/close by.

The two houses are grandfathered and if I want to replace them they give me a 30-day window to replace which isn't happening unless I go mobile which I do not want to do. So my current plan I am working with the builder on is a 1092sqft split foyer (this style b/c water table can get a little high on lot and I don't want to chance water issues in basement - plus there cheaper to build) with a 24x24 attached apartment that will almost make it look like a SFH with attached garage. The split foyer will have a 2 car garage on opposite end in the basement.

Expected rent is 1295-1395 for split foyer and 695-795 for 2br apt. ($1990-$2190).  I'm expecting to be all in for right under 200k with this setup (including lot).  With Just the split foyer and garage underneath I'm looking at roughly 160k all in (these figures include what I paid for lot). 

My concern is doing a multi-unit in an area of SFH. I'm zoned for multi however my concern is that renters may shy away from the main home due to the apartment. Just looking for input if I should abandon one of the septics and just build a SFH or go with the multi for more cash flow. I have attached a couple photos of what this thing will look like. Both will have separate parking/entrances from street and I'll probably put a privacy fence along back side of apt so main home can enjoy backyard in privacy.

Your thoughts are appreciated.