Turning your home into an income property can drastically cut down on your monthly mortgage bills.
Some people buy a home specifically to add an apartment to it, and others come across the idea later on in life. Before you can start making plans for all your newfound money, you need to make sure your home can easily be converted.
Here are some ways to figure out if your home is suited to be an income property.
Check The Zoning Regulations For Your Area
Every neighborhood is zoned a little differently, so you need to make sure that you are allowed to have an income property in your part of town. If your home isn’t zoned for this as it is, you might be able to present a plan to the city council allowing them to amend the rules for you. Once you have permission to have an income property, then you can get it set up.
Know The Income Property Laws In Your State
Again, every area is a little different when it comes to how income properties have to be set up. In most cases, the income property must have a separate entrance that can be locked on its own. There should be a clear means for a fire escape, and there should be a fire wall between the two apartments to shield against carry-over flames. Your state may or may not require these specific features for an income property, so contact your local Board of Realtors to learn more.
Compare Costs And Profits
Once you know what you want to do for your income property, you need to get a quote for how much the work will cost. You may already have some home remodeling done that takes care of most of the work. You might need a new addition, a new kitchen, basement remodeling, and more. Whatever the case may be, find out what the upgrades will cost and then compare those costs to the rent you can potential charge for the property. If the costs exceed the earnings, this may not be a good plan for you.
Not every home can be converted to an income property. Some of them are best left as single-family dwellings. Talk to a contractor about your options to see if you could start generating income.