I have two rental properties side by side a few blocks down the street from my house. I have a question as to the best use of these properties.
Each of them are on a 50′ x 200′ lot. They each have about a 700 SF house on them. There is a one lane paved street at the back of the properties with houses on the other side of the street. I would like to have a garage on one of the properties to use for my business.
Here is my question for you seasoned pros:
Would you build a garage at the back of one or both of the lots? And, what do you think about an apartment above?
The size of the building could be 40′ long, as we have 5′ setbacks. I considered separating the garage into a single-car for the apartment, and using the rest of the garage for my business.
Any suggestions would be greatly appreciated.
Thanks!
Bryan
“Objects in mirror appear closer than they are.”
Klakamp Construction, Findlay, Ohio
Replies
Sounds like you've more than enough room to build a garage/business area. It could improve the home's value, and add a sense of protection and enclosure for your tenants in the backyard, assuming you don't enter their space.
I'm hardly a seasoned professional, but here's my approach to the finances:
Anytime I can improve a property and get a rent increase, I try to do it. Everyone's numbers are different - for me, I use a ratio of about 150 to 1, that is, if I can spent less than $15,000 and get $100/month increase in rent, I'll do it. I have several properties and try to rank the various projects to see which one has the lowest ratio and do that first.
I would look at the cost to build the biggest structures allowed and what, if any, rent increase you could command (either immediately or with the next tenant) and apply your own ratio.
Maybe just build one at first as you've descibed, then once you get your shop settled in and the apt rented, build the other.
It sounds like you're in a nice position ...
The lots are 50' wide on street frontage and 200' deep with a one lane paved street between the rear of the lots and houses across it?
So, if you cut the lots in two you would have 4 lots 50' wide by 100' deep with a 5' set back requirement?
Sounds like enough room to build what you want on one of what would then be your 4 lots and then another small rental on the remaining one.
Assuming zoning permits it.
I've been thrown into better places than this.
Is there access for a fire crew, and would it be a valid 911 address if there was a need for a call?
A similar rental in town went up in smoke a few years back. It wasn't built with permits, Fire trucks couldn't navigate the access, and it was too far back for a hose to reach. Landlord was charged with negligence causing death or something like that, along with all the building infractions. Be sure you don't fall into this category.
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Dag,
I have already spoken with zoning, and there seems to be no problems like what you mention.
There is access for fire trucks, since there are already houses on the other side of the street behind the existing homes. I would be required to have paved off-street parking for 2 vehicles.
Also, I will not do this project without the appropriate permits.
Bryan"Objects in mirror appear closer than they are."
Klakamp Construction, Findlay, Ohio
I guess Dan T and I are pros at this , but I dont know where his is on this one .
I havent done it but my Dad did. Worked out well through the years. As a matter of fact 35 years later the little garage apartment is still drawing rent . Thats awsome to me. Now lets look at it from the business aproach;
The lots are more or less paid for or at least figgured in the buildings you own already. I call the remaining lot use a freebe. You can also borrow money onthem by way of "splitting the deed" which in a refinance the "bank" would give you or should , a quick claim. Or,... they could "add " the construction against the note. No biggy either way as long as the banker does his thing. Anyway the end result is using a value already owned for collateral. Of course if you own it all , it gets easiar.
I would not give storage underneath for an apartment. I dont like giving anything away and it would be just that. The only thing I include is what competition is furnishing. Which brings me to value. Its only value if its paid for in full. Believe it or not the garage portions will rent to renters renting mini storage for a separate fggure . That rent money cant be forgotten. If you use it your self , you will be deducting profit from your self. Nothing is free in the business world. If you have a need for the bottom area , then the bottom is at least locked in in principle.
Its a good set up for singles and it offers uncrowded outside space. For instance , look at the huge apartment complexes and sit in the parking lot and think about how close to each other those people live. Many of those would jump at the chance to be able to sit out side in peace and quiet. Allow an out side dog pen and you have something else to offer if the need arises. People value pets highly. Most are turned away becuse they even have them. I reccomend getting ready to accept pets by way of choices in floor covering. I would also be thinking about making apartments downstairs. A duplex , one high , one low. Still quiet living.
The best shop areas are those that were bought with a house already built. The best reason is that if a house is sold with a shop building , they never get a rightful appraisel. Kinda like building a pool. A realator- broker told me about shops to my own dismay at the time. She would not put any value on mine !!!!!!!! She simply explained it this way;
How many shops are in your neiborhood? Mine.
Why do you suppose there isnt more of them? Noone wants one but me.
Now , weve got a ratio of 75 to 1 that evidently chooses not to have one and they also have chosen not to pay for one. If we give yours away, we might be able to get a good price for your house.
Ive still got my house and shop. Thank you.
Think before you invest money.
I bought another house and figgured the shop as ZERO. I was able to geter done . The rent on the house covers the full payment , taxes , insurance, and a 200 dollar a month payday for me. I use the shop building , but its worth 200 a month also. Im affecting my own profit by using it . It has its own drive and doesnt impair parking on either property. Theres still room for a mobile home or a garage apartment on the property!
Many times I buy property because there is multiple uses. The way I figgure it , I can come closer to paying market value for the single use as others are figguring also. Then my profit is made by splitting or causing the double usage. Ive bought several just that way and they all added to profit. One , the timber was sold , another the land beside it was built on. The best deal I ever did was buying 1 1/2 acres in town. I made enough on the first lot to pay for all the land . The remaining lots were profit.
I think you have an exellent idea but I would build upper and lower apartments. Look for a free shop sold beside another rental.
Tim Mooney
I just caught this one. I was on vacation when it came up originally so I guess I just missed it. Sorry.
I have a house on a deep lot that was split yeas ago and a large garage built on the back. I don't know if Findlay has any special zoning but in Marion we just had to have it surveyed and split the deed. Costs about 600 bucks.
With 200 ft of depth and a road in the rear I might consider the shop and another rental and split the lots. I don't like the apartment above my shop personally as I don't want it to be easy to break into and I don't want any problems if I decide to cut lumber at 10 at night. DanT
Thanks Tim and Dan.
I've just been thinking about this for a while. Will do something with them down the road. I still need to fix up the one property and get it rented. Not enough time.
If I do a shop, it will basically be storage for my business - tools, materials, the occasional sawing (during regular daytime hours). If I ever sold the property, it would be a nice garage/storage rental unit. The other section I would rent to whichever rental unit wanted it, probably for about $75-$100 more a month. That's what units the size of a single car garage go for here.
Bryan"Objects in mirror appear closer than they are."
Klakamp Construction, Findlay, Ohio
Hi Bryan - As a landlord myself, one thing that I try to remember is that your homes are part of a neighborhood. I would consider how the creation of another structure on the site is going to influence the area in general, including visually. The money from an extra unit is a consideration, but I also think you should try not to hurt the surrounding community. Some people seem to divorce morality and ethics from money and business, but I think the best business people don't. As one poster wrote here on BT a while ago - just because you can doesn't mean you should.
So that it's clear, I am not impugning anyone who responded to your post, nor am I criticizing your ethics. I don't know anything about your neighborhood or any design that you might consider, just throwing another thought out there for whatever it's worth.
Good luck.
Don
If I were able to split the lots, then I would have 4 - 50' x 100' lots. I don't know if this is possible or reasonable to do.
The side setbacks are 5', and the setback from the street right-of-way is 30'. I can put under roof 30% of the lot square footage. That means that I can put 3000 SF under roof on each of the 50' x 200' lots.
Since this would be a residence, and not an auxiliary building, I am not under the 16' height restriction.
Hope this clarifies things a bit.
Bryan"Objects in mirror appear closer than they are."
Klakamp Construction, Findlay, Ohio