Three Reasons to Keep a “Spare Room”
I see you, 2022. Staring us down, giving us the stink eye; keeping us awake nights. Will rates climb? What will my house be worth in a year? Will I ever own a home?
This is a time of uncertainty. It’s also a time of opportunity. In 2022 we will be sharing ways you can take advantage of those opportunities.
First up: Your spare room. Mother in law unit. Granny unit. Whatever you call it, here are three ways owning extra living space will increase your wealth and security.
- Instant equity In 2020, Portland homes with extra living space sold for an average of 8% more than homes with the same square footage. That’s 8% of the median home price of $535,000, or about $43,000.
- Intergenerational wealth I grew up in North Denver, where the homes were small but every last one had a complete living area in the basement—kitchen, living room, bed and bath. It was assumed your newly married kids would live with you until they saved enough for a house of their own. This was the method a generation of immigrants—house painters, bakers, grocery clerks—used to pass on the dream of homeownership and amass wealth. In this tight housing market, with rents soaring and wages stagnating, this is maybe the best method to ensure that yours isn’t the last generation of your family to own a home.
- Rental Income Oh boy. If you want to be secure in your old age, become a landlord. Sure, there are risks and drawbacks, but if that two hundred square foot structure in your back yard can help you to pay off your home ten years early AND offer tax advantages, why wouldn’t you go for it?
So go ahead, 2022. Take your best shot.
Questions? Contact Elena Christian at 503-485-4378 or Melody Lewis at 503-485-4366.