HomehousingIncome property

Income property

So I like the idea of an income property. I am definitely not as bold as some personal finance bloggers who own two or three different residences, rent them out, and turn a nice little profit. That takes some serious cajones. I am far to risk averse and hate debt way too much to take something like that on. Heck. if I’m not even convinced purchasing a home for myself is a good idea, why would I buy one for someone else?

That said, the idea of a a mother-in-law rental sure does tickle my fancy, and in case you didn’t know, I like my fancy being tickled….wait, that doesn’t sound right. Girl Ninja and I currently live in a tiny little 700sqft unit above our landlord’s house. He has this giant mansion with 30 foot ceilings throughout, but on the back-left corner he put in a small one bedroom apartment. You know why he did this? OUR RENT COVERS ALL OF HIS HOUSING EXPENSES!!!!

Our landlord paid cash for his house (like a boss) and built our unit for the sole purpose of cash flowing his household expenses. Our $975/mo covers all of the utilities, property tax, and insurance. How sick is that? Dude doesn’t pay a dime to live in his 3,000+ square foot home because he lets us rent 700 square feet above his workout room. If that doesn’t turn you on I don’t know what will.

So when the time comes for us to pull the trigger and buy our first place, I am definitely going to consider the ability to add a mother-in-law (MIL) to the residence. In the greater Seattle area, that will most likely mean finding a house with an unfinished basement.

There are some serious pros and cons to this option. Pro, we could reduce our mortgage payment by half for renting out only a quarter of our house. Con, we share OUR home with someone else. Pro, adding a MIL to a home typically helps resale value and ease of sale since that feature will appeal to many buyers. Con, we share OUR home with someone else. Pro, the MIL would be a sweet place for guests to stay in the event we decide we don’t want to rent it out. Con, a MIL requires us to share OUR home with someone else!

I’d be 100% committed to going the MIL route if it weren’t for that one con. Sure renting it out might be tougher than we hope. Sure we’d become landlords and be much more accountable to fixing any issues with the house ASAP. Those things don’t concern me too much if we have an affordable mortgage. The only concern I have is that we could potentially rent to a creepy person that likes cutting people’s skin off. Hey, ya never know, it could happen.

I like the idea, but don’t know if I’d like the reality. What are the pros and cons as you see ’em? Would you add a MIL to your house (or future house if you are a renter like me)?



  1. It’ll be a bit before we buy a detached house (living in a townhouse now), but I am thinking about about having a spot w/ a MIL spot. My reason are twofold – I’d like to have an income stream to help out, but I’d also like a spot for my mom whenever she needs it.

    I have some reservations about renting it out (the screening process and all), but like anything, it’s a learning process. I might be a very picky landlord and might not maximize the income, but having a renter that I’m comfortable with living on the property will be a win-win in my book.

  2. One reno show I love to watch is Income Property; it centers around people wanting to turn space in their home into a rental, and the renos that are involved. I love the idea of it… but could we be landlords? Nope, I don’t think so. While having most (if not all) our mortgage paid with the rental money is certainly appealing, I agree with you 100% on your biggest con… neither Hubby or myself would want someone else sharing our home, and I doubt we’d ever be in a financial position to own a home large enough to allow for an income suite.

  3. Silence of the Lambs is one of my favorite movies too 🙂 In regards to having a casita, I’m a big fan of it for resale value. But like you, I really like my privacy. I wonder if your landlord pays income tax on your rent…

  4. I’d be much more likely to buy a Duplex than add a MIL to a house. Of course where I live MILs are not common at all and there are plenty of duplexes to be had and rented out.

  5. This may not be the same thing, but my dad rents out his property for farmers to grow wheat on it, and what he gets paid also pays all of his property taxes.

  6. I couldn’t see myself renting out part of our home. Like you said, the privacy part of it all would be the one big reason why we wouldn’t. That and we live out in the country, I don’t think there is enough of a demand to make it work where we live. I would be more inclined to build a big garage with an apartment above it, kinda like a guest house of sorts than to add on to our current home. The pros you mentioned do make sense to me, but they don’t outweigh the one con, and privacy is the exact reason why we decided to buy out in the country.

  7. Don’t discount the initial cost of that MIL. You’re landlord may be living expense free now because they paid those costs upfront. Conservatively, at $80/sq ft, a 700 sq ft apartment will cost at least $56k to build. That doesn’t include your hard wood flooring and granite countertops. When you start to consider a cash investment of that size, or borrowed dollars of greater size, it doesn’t tickle my… err, fancy.

    The average price/sq ft for realestate in Seattle is $173 (

  8. Are you sharing a home or are you sharing a house? I’ve lived in flats for a while – never once have I considered it “sharing” with people that live downstairs (or upstairs). I guess that’s because they didn’t have free access into my home…

  9. I couldn’t stand the thought of renting out part of our home to a stranger, though I would be alright renting a detached space such a loft over the garage.

  10. Can someone define what exactly a mother in law is? (In this sense; trust me, I understand the traditional meaning of the word…)

    How is it different from a house-share?

  11. I LOVE the idea, but since The Wife is home all day (she works out of the house) so there is something creepy about her home all day with our renter lol

  12. Persoanlly, I would not want a renter living so close to me. The wrong one will bug you to death. I would rather maintiain my rpivacy and distance from my tenants.

  13. Another con: You have to get that permitted and usually pay a fee/taxes on it.

  14. Yes! I’m still a renter but when I picture my future place it has a guest cottage for rental income and eventually aging parents.

  15. I can totally see myself doing this. You could totally rent it out to a friend, co worker, family member, so that they are not a creepy stranger.

  16. I am so against sharing my home with anyone other than husband and son. You are constantly aware of that other person and everything you do in YOUR home is based on that awareness. Did they just hear me fart? Was I walking too loudly? Do they judge my old bath towels hanging on the clothesline? And then of course constantly being reminded of their presence by their actions: their meal prep aromas, their social habits, their level of cleanliness vs yours, the list goes on.

    We’ve had a tenant and yeah, never ever ever again. I’d rather work harder to pay my cost of living expenses than have those expenses covered and not feel comfortable in my own home.

  17. We have a mother in law unit that we rent out. The space is ~1/3 of our square footage, but pays ~2/3rds of our mortgage. Yes, there is the trade off of having to consider that someone else is living on your property, but we’ve been very fortunate with our tenants thus far. In most cases, I actually like having them around. The caveat to this is that our place is set up ideally for this, it’s two stories, they have one, we have one, and we have separate entrances on opposite sides of the house. Also there’s no way for either of us to look directly into the other person’s space without going out of our way to do so. In short, it’s as private as possible. I suppose if we had bad tenants, or the setup was less than ideal, my view would be different, but we’re pretty careful with who we rent to, and try to treat them as we would like to be treated. Thus far it all works out. As an added bonus, if we ever fall on hard times and need more income, we could move in to the rental and rent out our space instead and likely cover the whole mortgage.

Comments are closed.

Related Content

Most Popular