A single-family property with a guest house is quite appealing to any married buyer. The property gives them a wonderful home for them and their family, and it provides a space for their in-laws to stay when visiting. Instead of sharing space, both families are accommodated, and stress levels are lower.
Was A Permit Obtained for the Additional Structure?
Researching the guest home and finding out if the builder had proper permits for the property prevents issues down the road. The sale won’t go through if the property wasn’t permitted and added onto the property deed. This is a possibility for any property that was built years before the guest house was constructed. However, a property with a guest house where both properties were completed within the same time frame is a better choice for the buyer.
How Will You Use the Guest House?
Buyers must review all clauses in their mortgage contracts when buying a home with a guest house. Lenders ask the buyer how they intend to use the guest house. Renting out the property might increase the mortgage payments and add some restrictions if the buyer chooses an FHA mortgage. They must also live in the primary home for the full duration of the mortgage contract. Properties with a guest house are more expensive, too, and some mortgages have caps on how much is available through the mortgage. Property buyers can learn more about mortgages for these properties by visiting Dustin Dimisa’s Facebook now.
If You Do Rent Out the Guest House?
How the utilities are split is a common factor that might turn some owners away from renting. If the utilities are all in the homeowner’s name, they remain responsible for any costs accumulated by their tenant. If the tenant leaves without warning, the property owner is stuck with the bill. However, it is recommended that the buyer contact local utility companies and find out if they can set up the guest house on a different account. The bill is still in the homeowner’s name, but it makes it easier to calculate the full cost of utilities for both properties.
Insurance Requirements for the Property
The location of the property shows if the home is in a designated flood zone. If so, the owner must purchase additional flood insurance along with homeowner’s insurance. Proof of the policies is required before the closing. The lender may also require mortgage insurance. Typically, mortgage insurance is paid until the borrower has paid at least 20% of the total mortgage.
Additional insurance could provide assistance for the borrower. Coverage for the mortgage that pays out if the owner dies helps the family pay off the mortgage. Reviewing all insurance options helps the homeowner get the right coverage for both properties.
A property with a guest house gives the family and visiting relatives ample space. The purchase gives the owner an opportunity to give their out of town relatives a full home. The guest home could be rented out to generate residual income, too. Buyers can learn more about financing a home with a guest house by consulting a lender now.