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Homeowner Forum / Construction / November 2005zoning conversion: single to multi-family
Hello. Can anyone comment on the task of converting a single family home to a multi-family? What are the major pitfalls? I'm sure there's more to add here... 1. Check with zoning department/building inspector to see if allowed. 2. Check with local property owners association for additional info. 3. 1st time landlord should investigate laws/liabilities. 4. Is there adequate street parking? 5. Cost to create separate utilities (gas and electric) 6. Must have 2 exits for each unit 7. not being able to run heating ducts would be a problem 8. not being able to tap into existing drainage pipes 9. fire code inspection. extinguishers, other? 10. fees for re-zoning/inspection. What happens if you're caught renting out an illegal basement apartment? I might buy the property described below. I'll bring an architect to the inspection. Thanks. -Bob -------------------------- BEGIN -------------------------------- This Spacious 2 Story Single Family Home Was Built Like A 2 Flat. 3 Seperate Private Entrances To All Levels. 1st&2nd Fl Have 2bed, Kitchen+sep Liv/Din Room Area.Full, Finished Basement. Newer Roof, Siding, Furnace And C/A, Flood Control And Sump Pump. walk To Shopping Bank, Public Transp. Approved Buyers Only - Quick Close O'k. 4 Bedrooms, 3.0 Baths Style: Other Type: 2 Stories Parking Space: 2 Garage Type: 2.5 Car Garage Taxes: $3,912 Dining Room: 12X12 Living Room: 13X12 Kitchen: 11X10 Master Bedroom 1: 10X09 Bedroom 2: 10X09 Bedroom 3: 15X09 Bedroom 4: 10X09 Basement: FINISHED; EXTERIOR ACCESS Bedroom : 13X10 Kitchen : 11X10 Bedroom : 10X08 LIV : 16X13 Dining Room : 12X12 Lot Dimensions: 30X100 Lot Size: Standard Chicago Lot Waterfront: No -------------------------- END ------------------------------ >Hello. Can anyone comment on the task of converting a single family >home to a multi-family? What are the major pitfalls? I'm sure there's [quoted text clipped - 9 lines] >9. fire code inspection. extinguishers, other? >10. fees for re-zoning/inspection. 11) adequate hot water supply 12) sound proofing (damping) >What happens if you're caught renting out an illegal basement >apartment? Depends on your municipal laws, and official posture. Here (Calgary, AB, Canada) there are more than five thousand *known* illegal suites. If the neighbours complain, the city will close them down. That's the official posture. Unofficially, the city is reluctant to take action ... there simply is not enough low rent housing to be closing them down. >I might buy the property described below. I'll bring an architect to >the inspection. >Thanks. One other point you might consider. Here, rent is about seven dollars per thousand dollars of property value. Which means that for a unit renting for 1400 dollars, the target purchase price would be 200 thousand dollars. I'm sure your city has similar rules of thumb. Do remember that you are buying a single family home. Do not take the illegal suite's rent into account in considering the purchase. The bank won't. Ken Ken, Thanks for the information. I'm not sure what you were getting at when mentioned price-rent ratio. Why does that matter? Can you elaborate? Rental income will allow me to pay off my mortgage quicker and provide retirement income hopefully. -Bob > One other point you might consider. Here, rent is about seven > dollars per thousand dollars of property value. Which means that for > a unit renting for 1400 dollars, the target purchase price would be > 200 thousand dollars. >Ken, > [quoted text clipped - 4 lines] > >-Bob Sorry, Bob, if I wasn't clear. Your plan is sound enough ... provided you don't pay too much BECAUSE the property has a suite. What I was trying to get to was this: Property has a value depending on its use. Until yours is re-zoned, it is a single family residence and that is the value you should apply. You should not pay extra for an illegal suite because that could be shut down at any time. There is no way that you can count on rent from it because it is illegal. Obviously, the mortgage company or bank will not take the rent into account in determining your ability to pay. Re-zoning can be simple and inexpensive or it can be lengthy, frustrating, and expensive -- depends on the property, the neighbourhood, the neighbours, the development officials etc. etc. Spot zoning .. which likely is what you would be seeking ... is the most difficult to get. If you are able to rezone it, and you can rent the suite with certainty, then the property is worth the higher of its value as a single family home or as a rental property with two suites. Here, even in this very tight real estate market, homes with illegal suites sell for pretty much what a single family home in the same area sells for. Hope this is clearer. Ken |
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