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Dear Monty

No nonsense real estate advice

How to decide to convert your home to a two-family house
Dear Monty: I need to find out if I can convert my single family into a two-family.

The second thing is, if so, what are the rules for transformation legally?

Monty’s Answer: The rules you seek are not uniform across the U.S.

There is no federal building code except one: HUD has a code for the design and construction of manufactured housing.

Building codes protect public health and safety.

According to Lawinsider.com, International Residential Code (IRC) is “the comprehensive stand-alone residential code that creates minimum regulations for one-and-two family dwellings.

It combines all building, plumbing, mechanical, fuel gas, energy, and electrical provisions for one and two family residences.

Each municipality controls the codes, so if you live on a city’s border and your next-door neighbor lives across the line in a suburb, permitting construction or remodeling projects could be different.

Always locate your property’s municipality for permit and code questions.

The process
• The first step is to contact the municipality.

Much of the information you need could be online.

The zoning office is your first stop to learn if they permit a two-family home.

Suppose you live in a development that has a homeowners association.

In that case, that is your second stop, as HOAs commonly have rules that may affect your decision.

• Once you have passed the zoning test(s), there could be multiple departments to check.

The larger the municipality, the likelihood grows of a more complex process.

Other possibilities are a building inspector, a building code office, a planning department, and maybe more.

• You may be required to furnish a floor plan to scale depending on the extent of the renovation and a building permit which requires a fee.

• After determining the steps to proceed legally, you decide if this is an intelligent decision.
Many homeowners will declare that cost is not an issue when they begin, but regret it when it comes time to sell.

Here is a list of information you need to determine if the project makes sense.

  1. What will it cost, including everything?
  2. What is the “as is” value of your home?
  3. What are similarly converted homes selling for in your neighborhood?
  4. What are the rents in the neighborhood?
  5. Who will do the actual work? If you need a contractor, what will it cost?
  6. If you are doing the work yourself, are you qualified?
  7. Do you have the time?
  8. Have you put together a material list?

    Almost done
    Assuming it all makes sense on pencil and paper, just one more test.

    Compare the “as improved” cost of the remodeled home plus the expected rental income against the cost of selling and buying a new or newer unit built as a two-family home.

    Quick Caveats
    A remodel is not a project to practice.

    What you learn on TV does not convert to experience.

    Suppose you did not grow up in the trades.

    In that case, you are likely better off paying tradespeople or an experienced general contractor.

    Always get the required permits because if you don’t and sell later and do not disclose that, it presents a potential costly liability.

    Also, think about what it takes to be a good landlord.

Richard Montgomery is the author of “House Money – An Insider’s Secrets to Saving Thousands When

You Buy or Sell a Home.” He advocates industry reform and offers readers unbiased real estate advice.

Follow him on Twitter at @dearmonty or DearMonty.com.

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