MIL suite supplements couple's income by $10,000 per year!
In July 2003, Colleen Cameron and her soon-to-be-husband, Michael, were looking to buy a house in the North Shoreline area of Seattle. While house-hunting for their dream house the couple stumbled upon a beautiful chateau that had everything they wanted and then some.
"It just so happened that the house we fell in love with also offered great income-producing potential as it had an 800 sq. ft. mother-in-law suite in the basement," says Colleen.
After the married coupled settled into their new home, they decided that rather than rent out their mother-in-law suite as a 'regular' rental (which was plentiful in their area already), they would convert their mother-in-law suite into a furnished, corporate rental. They spent about $4,000 to finish the basement and convert it into a full-fledged rental property.
"We knew by offering our mother-in-law suite as a furnished, short-term rental, we could reach a different niche and have less competition in the rental marketplace," says Colleen. "Plus, furnishing the property was easy since we both brought furnishings into the marriage - we had two of everything so we were able to furnish our downstairs apartment without spending a lot on furnishings."
To find renters, the couple lists their mother-in-law suite on Craigslist.org and CorporateHousingbyOwner.com - both sites, say Colleen, have brought her solid leads, although she says with Craigslist the process is more manual because she has to post her property daily. With CorporateHousingbyOwner, she says, her listing is always front-and-center.
"In five years of renting out our furnished mother-in-law suite, we have only had one month with no renter," she says. "In fact, our most successful renter stayed for two years. He was a divorcee who needed flexible housing to get him through his life transition."
Benefits Galore
Colleen says that there are many great benefits to renting out part of their home as a corporate rental.
For one, she says she is able to command a higher rent because the basement apartment is fully furnished and offers flexible month-to-month rental terms. Colleen says her mother-in-law suite has been so profitable that she has been able to supplement her family's income by about $10,000 per year, with the potential to bring in more.
"Renting out a part of your home is definitely worth doing if you have a basement apartment with a separate entrance," says Colleen. "The main reason is you can instantly diversify your income stream. While my husband and I are gainfully employed, there’s always the risk that one or both of us could lose our job. We have this extra income to fall back on, just in case."
Also, Colleen says she enjoys not being tied to any one renter for 12 or more months in case things didn't work out. She also likes the fact that her renters only bring along their necessities and that they don't move large furniture in and out of her basement, which means less wear and tear on her home.
Another huge benefit to renting out her basement suite, Colleen says, is that she lives on-site. "I can conveniently take care of requests and keep an eye on the place."
Plus, because the couple is already paying for amenities like cable, water, electricity, trash, wireless Internet, etc., it doesn't cost them a whole lot extra to provide amenities to the basement apartment.
"We're able to offer our home at a low, all-inclusive rental rate because we don't incur a lot of extra fees ourselves," says Colleen.
A Word to the Wise
Colleen says that renting out a furnished apartment isn't for everyone.
"You do have someone living in your house and you have to continually be on the look out for your next renter," says Colleen. "It can be time-consuming to market your home."
She also advises that someone shouldn't buy a home with a mother-in-law suite unless they can afford the full mortgage payments themselves.
"We are fortunate that we can afford our mortgage. Any income we make from the mother-in-law suite is a bonus. I tell people looking to do what I'm doing to make sure they're not dependent on income from their rental suite because they're putting themselves at unnecessary risk."
Overall, Colleen says because they have found so much success renting out a part of their home they may never go back to not renting it out. "It's a peace of mind for us. We don't have to think twice about money since we supplement our income with our greatest asset - our home!!"
