Owner Occupy then Rent

[J.C. Campbell]

Hello All,

My wife and I are trying to decide whether to pull the trigger on offering on a single family property. It will not be a house hack from the get-go but we'd like to make it into one by finishing the loft space above the detached garage. This will be a significant project including running plumbing from the house or road, insulation, drywall, electrical, and finishes. The hope is that we can either STR or LTR this space, and possibly rent the rest of the house out later if we want to move out. It's in a desirable area with good schools and walkable to a nice downtown (Hopkins). I am trying to think of how to approach this and weigh the cost benefit of finishing this space. Would welcome any thoughts, ideas, or similar experiences.

[Ben Einspahr]

@J.C. Campbell my feed back is purely conceptual base so as others mentioned, make sure there is not any issues with zoning, permits, renting, etc. Example, some cities do not allow ADUs to be rented out if it is not an owner occupied property.

How long are you planning to occupy the property? If this is more of a lifestyle house hack and you will live there for 4+ years, then I feel the investment makes since. 

If the reno takes 12 months and your are looking to move out shortly after, I would look to see what your ROI is on that reno and could that 50-100k be used elsewhere? Maybe on a property that does take so much grunt work and time to get up and running.

If your personal situation is anything like mine with a wife and family and privacy is a must, this could be a good long term investment.