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Thinking Outside the Box to Buy Your First Home?
You really want to buy your first home but you hate to get tangled in debt? Then again, the rent just keeps going up and, according to reputable sources, it may not slow down anytime soon? You know that real estate can be a wise investment. You're ready to “think outside the box” but nothing much has popped up yet.
I was recently reminded of one idea I read in a book some time ago. It's intriguing, though I have to admit, it's probably not something I'd be likely to do. Then again, I've been doing it for years with a family member. What am I talking about? Taking an idea that's as old as can be – and still popular. After all, the Golden Girls did it. I think the Big Bang folks do it. Even some of the Friends did it. Buy a house and search for roommates who can help pay the mortgage for you!
My senior mom and I have been together for over 10 years and are doing great. My kids did it when they were in college. And nowadays, many in their 20s, 30s, and 40s (and yes, 50s, 60s, and 70s!) are doing it. Now, most of the people I know are ALL renting and splitting the rent. But a few wise peep have bought their first house, thinking it through very carefully and wisely. Then they've gotten busy, went on a careful and cautious search for roommates, and rented out 2 bedrooms.
I did some research and found several fascinating articles on the topic which are saved in my Pinterest board for first time home buyers. But I thought I'd share some of them here as well to make it easier for you:
- JD’s Millennial Minute: Let Your Roommate Pay The Mortgage
- How to Buy a House and Pay Off the Mortgage in Less Than 10 Years
- Could You Buy a House Without Getting a Mortgage? This Guy’s Done It 3 Times… from The PennyHoarder
- How I Earned an Extra $40,800 in Two Years Without Lifting a Finger
- 7 Things to Remember Before Renting Out a Room
As you can tell from some of the articles, it's vital to do your due diligence and homework to prepare for this undertaking. It's hard enough to buy your first home. It could be even more of a challenge to then throw landlord-ing into the mix. First you need to think long and hard, ruthlessly and honestly about living with a roommate. Not everyone can do it. And not everyone can do it with just anyone. One friend's first roommate drove her NUTS! The second was awesome and they became close friends. I do great with my senior mom. But I'm honestly not sure how I'd do with someone else. And be sure to check any prospective tenants out thoroughly – credit check, background check, and Megan's Law check (see my Pinterest Board on Safety Tips for helpful links 😉 ).
On top of that, you need to check the zoning and housing laws in your city AS WELL AS in any HOA (home owners association) a home may be in. I talked to a delightful young woman who works for the City of Roseville CA and, as I understood it, you can have a maximum of two unrelated people move in with you. More than that is not allowed. (But you should DEFINITELY call and talk to them yourself and verify nothing has changed. Roseville's planning department phone number is (916) 774-5276.) And I imagine there are some/many HOAs that won't allow it at all.
Don't forget to check out the insurance needs as well. That's vital when you buy your first home in general and doubly so when you throw roommates into the mix. I saved several articles on that topic to my Pinterest board Rental and Renters' Resources and here's a link to one of the best of the bunch from Renting Out Rooms – How Roommates in Your House Affect Your Homeowners Insurance. And yes, I HIGHLY recommend being totally honest with your insurance agent AND requiring each roommate get their own renter's policy.
Since you're still reading, perhaps you've decided you CAN handle it, and your city DOES allow it. Now it's time to search the MLS for homes for sale in your city – in my case, Roseville CA. I know it can be done with less. But I would personally recommend having one bathroom for every bedroom – at least 1/2 for some. The whole reason I started on this thought process came while working on selling a lovely 4 bedroom 3 bathroom home for sale in the Roseville Heights neighborhood of Roseville. I always like to think of various uses for a home, and this one seems practically made for a roommate situation. It was a 1920's home that was taken down to “studs and joists” then rebuilt beautifully new. There is a nice big living room, dining room, and kitchen (great room concept) in front. Then a master bedroom/bathroom suite. Three more bedrooms, 1 1/2 more bathrooms, and even an extra room. How perfect is that!
If twas me, I'd take the Master suite, keep the front bedroom for an office, then rent out the two back bedrooms while turning the back bonus room into a den for the tenants. Of course, they'd get kitchen and laundry privileges. But, depending on how well everyone meshed, you'd have some separation of spaces if you needed it.
This home has no garage, but it does have side yard access. That means it would be easy to have plenty of parking off street as well as on street – another great thing to look for when you are planning this out.
Rent Your Roseville Area House Short Term
One other idea that has started becoming a bit more popular is to rent your house – either whole or in part – on a short term basis. One of my clients was considering doing that while going away to another state for a couple of years. Another client was shopping for homes and looking at casita options (tiny cottages that may or may note be attached to the main house) with an eye to turning the casita into an AirBNB.
If that interests you be sure to check with your home owners association and read all the city ordinances. For Roseville – their website is currently showing Short Term Rental ordinance (Jan 15, 2019) and Short-term Rental Permits (May 13, 2019) with plenty of info and links including discussing registration requirements, taxation and permit requirements and more but that could increase with time. I do know that currently Sun City Roseville HOA limits rentals to a minimum of 6 months and I'm guessing many other HOAs have similar limitations if not more stringent. It's always vital to triple check!
What Do You Think?
Interested? Intrigued? Ambivalent? I'd love to hear your thoughts – either in the comments or on my Facebook page – Roseville California Joys. 🙂
And when you're ready to buy your first home, whether you do it with roommates or on your own, give us a call at 916-768-0127 or email us at Kaye@KayeSwain.com. We'd love to help you with all your real estate needs. 🙂
P.S. Want to see more homes? Here are all the homes for sale Roseville CA under $600,000 with 3 bedrooms and 3 bathrooms, updated daily. Enjoy 🙂