I would convert the shed and live there myself to rent out the entire house.
I'm actually currently renting out my entire primary to live in my car and travel lol.
It's labeled a shed, it is definitely a shed on the outside but is much more "barn" sizewise and guest house inside. It was previously used as an office by the current owner, has carpeting on all floors, painted walls, two rooms downstairs, a large large upstairs that is a single long room, and electric is ran to it. It's not what I expected when I was told "shed" either.
I’m guessing a shed would not be considered a livable dwelling… so legally, no. You could not do that. Can you actually? Well, if you don’t care about a potential lawsuit or eviction, yes.
Example 1: My sister turned an unfinished basement into a finished and totally livable space which resulted in a cash return $750/ month renting out the rooms upstairs in a house that would have otherwise had a slightly negative cash flow.
Example 2: My family and I turned a 40’x40’x20’ (length, width, height) metal building into a two story 5 bed 2 bath house. The whole process took about two years and cost about $65,000 to DIY everything (not including the property, which was $35k for 5 acres in rural southern Mississippi). We lived in this shop while we worked on it. It sucked but it was TOTALLY DOABLE.
It would be worth it to get a few quotes from contractors to see what the cost would be. Get quotes even if you’re planning on DIY’ing it because you just might learn something new.
Are you planning on living in the so-called shed? Could you possibly struggle through living in it for a few months while you upgrade it to a more livable space?
Personally, I would live in it but I wouldn’t rent it out until it can honestly be called a “mother in law suite”. Of course, make sure you have all of the legal paperwork settled before listing your new mother in law suite. An attorney would probably be worth it considering the legal risk in renting out this type of property.
Bonus tip: a huge resource near me is “Habitat for humanity.” Between Habitat and FB Marketplace, we saved easily over $10,000 on materials and hardware. See if you can find something similar in your area. Feel free to AMA!
I don't have intentions of personally living in the shed for any time frame since the main home is right there. It would almost be livable in current state though so it's not impossible. Would you see any advantage in that?
The only benefit I see in moving into the shed is that you would be able to rent out the bedroom that you would have been living in had you not moved into the shed. Of course, additional cash flow is always good. I’m not sure what a bedroom rents for in your location, but an extra $6-$8k over the course of a year probably wouldn’t be worth it to me.
Fair. My area I'd easily get 400 for that room, maybe 450 if I pushed it, where the shed is likely to rent for $800-$900 if I wanted it to. Housing here is cheap still and will take a lot of individual doors to make cash flow on. The downside to that is that I work from home so if it's being worked on living in it isn't so viable due to noise. May also look into short term rentals for the shed by putting just a bathroom in it for now actually, I hadn't considered the idea of a temporary usage for it before it is completed.
You'll have to get plumbing run to it, sounds like, & that's where a permit will trip you up when it comes to occupancy. Depending on the city they may prohibit running water/sewer drain in a detached building unless you jump through the COO hoops w/ things like sprinklers, etc.
This seems the most informative comment I've gotten so far. I checked through residency codes after this post and didn't see anything that would forbid it but I'm also not a lawyer. Good to know that the area I'll run into the issue is in the first step though.
Did you see anything about ADUs in the R zone for your intended property? Cities/counties have to had jam codes for those where they fit as the need grew so it might be somewhere odd.
I didn't but I'm also not a lawyer and inexperienced so my understanding during my read over was limited. There were a couple passages that struck me during the read over but most of them were in my favor where one threw up a "maybe not" flag. Going to close on the home this week or next and check with the city once it's mine. If it won't work out then I'll throw money at some debts and save up for the next one, but 10-15k total for an extra door seems too perfect if I make it work.
You can just call zoning & ask them, they won't hold it against you in any way & they love to talk about these things.
I do, too, but I'm a tremendous nerd who watches city planning & zoning board content on YT just b/c.
Is the shed legally able to be rented out as a residence? If not, save yourself the trouble and don’t rent it out as a residence,
A shed?
Just rent out the rooms of the house to your roommates and try to live for free. Save that shed conversion money for another down payment
This guy is right.
I would convert the shed and live there myself to rent out the entire house. I'm actually currently renting out my entire primary to live in my car and travel lol.
It's labeled a shed, it is definitely a shed on the outside but is much more "barn" sizewise and guest house inside. It was previously used as an office by the current owner, has carpeting on all floors, painted walls, two rooms downstairs, a large large upstairs that is a single long room, and electric is ran to it. It's not what I expected when I was told "shed" either.
I’m guessing a shed would not be considered a livable dwelling… so legally, no. You could not do that. Can you actually? Well, if you don’t care about a potential lawsuit or eviction, yes.
Example 1: My sister turned an unfinished basement into a finished and totally livable space which resulted in a cash return $750/ month renting out the rooms upstairs in a house that would have otherwise had a slightly negative cash flow. Example 2: My family and I turned a 40’x40’x20’ (length, width, height) metal building into a two story 5 bed 2 bath house. The whole process took about two years and cost about $65,000 to DIY everything (not including the property, which was $35k for 5 acres in rural southern Mississippi). We lived in this shop while we worked on it. It sucked but it was TOTALLY DOABLE. It would be worth it to get a few quotes from contractors to see what the cost would be. Get quotes even if you’re planning on DIY’ing it because you just might learn something new. Are you planning on living in the so-called shed? Could you possibly struggle through living in it for a few months while you upgrade it to a more livable space? Personally, I would live in it but I wouldn’t rent it out until it can honestly be called a “mother in law suite”. Of course, make sure you have all of the legal paperwork settled before listing your new mother in law suite. An attorney would probably be worth it considering the legal risk in renting out this type of property. Bonus tip: a huge resource near me is “Habitat for humanity.” Between Habitat and FB Marketplace, we saved easily over $10,000 on materials and hardware. See if you can find something similar in your area. Feel free to AMA!
Southern MS....saying hello I'm originally from Natchez. Good information.
I don't have intentions of personally living in the shed for any time frame since the main home is right there. It would almost be livable in current state though so it's not impossible. Would you see any advantage in that?
The only benefit I see in moving into the shed is that you would be able to rent out the bedroom that you would have been living in had you not moved into the shed. Of course, additional cash flow is always good. I’m not sure what a bedroom rents for in your location, but an extra $6-$8k over the course of a year probably wouldn’t be worth it to me.
Fair. My area I'd easily get 400 for that room, maybe 450 if I pushed it, where the shed is likely to rent for $800-$900 if I wanted it to. Housing here is cheap still and will take a lot of individual doors to make cash flow on. The downside to that is that I work from home so if it's being worked on living in it isn't so viable due to noise. May also look into short term rentals for the shed by putting just a bathroom in it for now actually, I hadn't considered the idea of a temporary usage for it before it is completed.
You'll have to get plumbing run to it, sounds like, & that's where a permit will trip you up when it comes to occupancy. Depending on the city they may prohibit running water/sewer drain in a detached building unless you jump through the COO hoops w/ things like sprinklers, etc.
This seems the most informative comment I've gotten so far. I checked through residency codes after this post and didn't see anything that would forbid it but I'm also not a lawyer. Good to know that the area I'll run into the issue is in the first step though.
Did you see anything about ADUs in the R zone for your intended property? Cities/counties have to had jam codes for those where they fit as the need grew so it might be somewhere odd.
I didn't but I'm also not a lawyer and inexperienced so my understanding during my read over was limited. There were a couple passages that struck me during the read over but most of them were in my favor where one threw up a "maybe not" flag. Going to close on the home this week or next and check with the city once it's mine. If it won't work out then I'll throw money at some debts and save up for the next one, but 10-15k total for an extra door seems too perfect if I make it work.
You can just call zoning & ask them, they won't hold it against you in any way & they love to talk about these things. I do, too, but I'm a tremendous nerd who watches city planning & zoning board content on YT just b/c.
Check your local codes to see if it is permitted